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WILLIAM R. PERKINS 
LIBRARY 


DUKE UNIVERSITY 


CENTER FOR 
SOUTHERN STUDIES 


DUKE 
UNIVERSITY 





LIBRARY 





JAMES B. DUKE: 
MASTER BUILDER 


JOHN WILBER JENKINS 





, James B. Duke 


Master Builder 


by 


John Wilber Jenkins 


The Story of Tobacco, Development of 
Southern and Canadian Water-Power 
and the Creation of 4 University. 





NEW YORK 
GEORGE H. DORAN COMPANY 


120928 


COPYRIGHT, 1927, 
BY GEORGE H. DORAN COMPANY 


JAMES B. DUKE: MASTER BUILDER 
es 
PRINTED IN THE UNITED STATES OF AMERICA 


INTRODUCTION 


* 

“America has many merchant princes and captains 
of industry, but only three industrial kings: John D. 
Rockefeller in Oil, Andrew Carnegie in Steel, and 
James B. Duke in Tobacco,” a financial writer recorded 
in Leslie’s Weekly more than twenty years ago. That 
was the judgment of others, in and out of Wall Street. 
Opinions may differ as to relative rank, but certainly 
no men ever occupied more commanding positions in 
their respective branches of the nation’s business. And 
it is significant that, in time, these three became Amer- 
ica’s foremost philanthropists. 

Their careers were not unlike. All were self-made, 
rising unaided from poverty to power and wealth— 
the tall York State boy, going West, getting his start 
in a grocery store and eventually merging rivers of oil 
into a golden stream; the canny little Scotchman, turn- 
ing from a telegrapher’s key to the mastery of steel; 
and the robust Southern farmer lad who, beginning by 
flailing out tobacco on a log-barn floor, came to domi- 
nate the world’s tobacco trade. Each created the ex- 
tensive machinery of production and distribution which 
extended his trade into new and untried fields; and 
each of them devoted as earnest thought to the disposi- 
tion of his fortune as he had to its accumulation. 

Few will agree with Mr. Carnegie, that “To die rich 
is to die disgraced”; but feudal fortunes are no longer 
in favor. Men of wider vision have a burning desire 
to do something for others, to leave behind them some 
monumental beneficence that will go on serving human- 
ity for generations. That has been the saving grace 
of our large fortunes. Greed has not been banished. 

Vv 


120928 


INTRODUCTION 


We have our share of selfishness and avarice. But in 
no other time or country has wealth seemed so con- 
scious of its responsibilities or contributed so liberally 
to the general welfare. Giving on so vast a scale is 
something new in the world. : 

In a single generation we have seen American indus- 
tries grow from comparatively small beginnings to the 
largest enterprises ever known, with a capacity that 
seems almost limitless, supplying home markets and 
carrying our trade around the globe. 

Measuring by millions, in capital, dividends, output, 
trade balances, this unparalleled commercial develop- 
ment, we are inclined to lose sight of the human ele- 
ment. Yet these mammoth industries were created by 
individuals as truly as were the blacksmith shops and 
country stores of other days, most of them by men who 
began without a dollar and worked their way up from 
the ranks. Asa rule they were principally the creation 
of some. one man, more far-seeing and enterprising 
than his competitors, who had the daring and ability to 
carry through undertakings which others hesitated to 
attempt. 

Whatever their faults or virtues, these men loom 
large in the history of our time, for they must unde- 
niably be counted among the makers of America, the 
America of to-day in which we live and have our being. 
Among the outstanding figures in commerce and finance 
there have been few as enterprising or successful as 
James B. Duke, and hardly one whose career presents 
more vivid contrasts. 

Born on a farm so poor that his family could hardly 
wring a living from its soil, reared in a section impov- 
erished by war and “reconstruction,” he became one of 
the largest manufacturers of his day. Working in the 
fields, beating out tobacco in an old barn, eventually 

vi 


INTRODUCTION 


he revolutionized the industry and controlled the ier 
part of the entire tobacco trade. 

Driving through the country with his father in a cov- 
ered wagon, learning his first lessons in trade by bar- 
tering at cross-road stores, he became one of the mas- 
ters of merchandising. Bernard M. Baruch and others 

_ have called him “America’s greatest merchant.” Hav- 
ing but scant schooling himself, never considering col- 
lege training essential to business success, he made a 
princely gift to education and furnished the means to 
create a great university. 
_ Mr. Duke has been called “almost the last of the 
log-cabin millionaires’—a misnomer, for he was not 
born in a log cabin and never lived in one, save for a 
few months after the Civil War. He was long ago 
designated as “The Tobacco King,” a title he may have 
deserved, but never relished. Numbered for thirty 
years among our “Captains of Industry,” few of that 
group were less known to the general public and more 
than once he has been termed perhaps “the least known 
of America’s men of large wealth and influence.” 

It was not, in fact, until the announcement of his 
gift of $40,000,000 to establish a university, build up 
hospitals in his native South, and provide for orphans 
and for aged ministers in their declining years, that the 
nation at large came to realize something of the part 
he had played in his generation and the generous spirit 
that led him to devote his means to humanity. 

There were reasons for this. Shunning the lime- 
light, he had an innate modesty that amounted almost 
to shyness with strangers. One of the largest of ad- 
vertisers, spending millions in exploiting his products, 
he cared nothing for personal prominence. 

Luxury meant little to him. Leisure he never en- 
joyed. The thought of retirement, of “taking things 

vii 


INTRODUCTION 


easy,” hardly entered his mind. Fond of doing things, 
that was his life, and there was never time enough for 
all he wished to do? 

Tall, rugged, red-headed, big mentally and physi- 
cally, there was something granite, unbreakable, in his 
make-up. ‘He was like one of Cromwell’s ‘Old Iron- 
sides, ” a friend remarked. With the dignity and re- 
serve of the Puritans and much of their rigid belief, 
there was in his personality none of their hesitant cau- 
tion or narrowness of view. In business matters his 
mind swept over States and continents, and the space 
of years. Taking what seemed at times tremendous 
chances, he staked millions without a tremor on enter- 
prises which others considered risky if not reckless, but 
of which he had not a shadow of doubt. 

Few men were more severely assailed in the long 
and stormy periods of anti-trust agitation, yet his in- 
difference to criticism was proverbial. “I never saw 
any one so unconcerned about attacks,” one of his asso- 
ciates said. “Making no reply himself, he would tell 
us to ‘pay no attention to them.’ ” 

“Tobacco is the poor man’s luxury,” was a favorite 
saying of his. “Where else can he get so much en- 
joyment for his five or ten cents?” Never losing sight 
of the fellow who cannot afford to pay more than a 
nickel or a dime for his smoke, catering especially to 
the masses, no man did more to make the tobacco trade 
one of the country’s largest industries. Devoting his 
later years to hydro-electric development, he was privi- 
leged to see water-power become our mightiest source 
of electric energy. 

Determined from boyhood to “be a rich man,” 
wealth was to him not an end but a means. ‘Money 
makes jobs for men” was the keynote of his financial 
philosophy. Stimulating ambition, providing work for 

Vill 


INTRODUCTION 


against waste or dissipation of funds, constantly in- 
creasing in principal with means for ever-broadening 
service, Mr. Duke sought to make his Endowment as 
enduring as wisdom could foresee or forethought pro- 
vide. 

Starting at the very bottom, with bare hands, he 
climbed to the heights of commercial and financial 
power. Realizing his boyish dreams and the ambi- 
tions of his later years, perhaps his greatest satisfac- 
tion, in the end, was in feeling that the wheels of in- 
dustry he had set in motion would never stop turning; 
that they would go on, driving factories and railways, 
building up towns and cities, colleges, churches, hos- 
pitals, supporting ministers and orphans, long after he 
had passed away. 

Is not such a personality well worth knowing, such 
a career all the more worth recounting because it is 
so unfamiliar to most of his fellow countrymen? 






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ILLUSTRATIONS 


PORTRAIT OF JAMES B, DUXE . : / 4 Frontispiece 
FACING F” 


WASHINGTON DUKE, FOUNDER OF TIIE FAMILY FORTUNES 
ARTELIA RONEY DUKE, MOTHER OF JAMES AND BENJAMIN 


THE OLD HOMESTEAD NEAR DURHAM WHERE JAMES 
DUKE WAS BORN . ' ' ’ 


BENJAMIN N. DUKE 

LOG BARN THAT WAS THE DUKES’ FIRST FACTORY 
DURHAM PLANT THAT MADE CIGARETTES BY MILLIONS 
THE RISING YOUNG TOBACCO MAGNATE . , . . 
MRS, JAMES B. DUKE : p . . . . 
DORIS DUKE, JAMES DUKE’S ONLY CHILD . 


BRITISH~AMERICAN BANQUET MENU-—CABLES SENT BY 
DUKE . ' ‘ . . . . 


GREAT FALLS AND FISHING CREEK STATIONS, SOUTH CARO=- 
LINA . ‘i . . . 


THE MOUNTAIN ISLAND POWER PLANT, NEAR CHARLOTTE 
NINETY-NINE ISLANDS STATION, ON BROAD RIVER . ‘ 


RHODHISS STATION AND COTTON MILLS . . . ‘ 


ISLE MALIGNE, THE 540,000-HORSEPOWER STATION ON 


THE SAGUENAY  . . ‘ . . . . 


OFFICIALS OF POWER AND ALUMINUM COMPANIES WITH 
MR. DUKE ON HIS LAST VISIT TO CANADA, JULY, 1925 


45,000-HORSEPOWER HYDRO-TURBINE, ISLE MALIGNE, 
CANADA . ° . ‘ . 


A GLIMPSE OF “DUKE FARMS,” THE WONDERLAND CRE- 
ATED IN NEW JERSEY . y 


“ROUGH POINT,” THE SEASIDE ESTATE AT NEWPORT : 


THE FIFTH AVENUE MANSION, OVERLOOKING CENTRAL 
PARK , . . . 


. . . ° . 


XV 


104 


128 


174 
174 
180 
180 


186 
188 
192 


196 
200 


200 


22. 
234 
24. 
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26. 


277 
28. 


29. 


30. 
31. 


ILLUSTRATIONS 


FACING PAGE 


TRINITY COLLEGE LIBRARY . : E : 5 1) 232 
“EAST DUKE” BUILDING . . ; ‘ ; 2 lage 
THE COORDINATE COLLEGE FOR WOMEN, DUKE UNI- 
VERSITY, WHICH WILL INCLUDE TRINITY BUILDINGS . 242 
CHAPEL CAMPUS—CENTRAL BUILDINGS PLANNED FOR 
DUKE UNIVERSITY , : t : : ‘ woh ogee 
DUKE UNIVERSITY STUDENTS, THE GUARD OF HONOR AT 
ITS FOUNDER’S FUNERAL . ; : , : . + e260 
CHAPEL TOWER AND ADMINISTRATION BUILDING ., pe eer 
INTERIOR OF CHAPEL, DUKE UNIVERSITY ? : ao 
MEDICAL SCHOOL AND HOSPITAL, ONE OF THE MAJOR 
GROUPS OF UNIVERSITY BUILDINGS P ‘2d 
TYPICAL DORMITORY GROUP, ARCHITECT’S DESIGN . a6 276 
THE UNION CLOISTERS—-DUKE UNIVERSITY . . » 275 


xvi 


JAMES B. DUKE: 
MASTER BUILDER 


CHAPTER ONE 
Early Days on a Southern Farm 


HE old farm, near Durham, N. C., where the 
ae “Duke boys,” as the neighbors still call them, 
were born and reared, is to-day very much as it was 
seventy years ago. The weathered two-story frame 
house; the “front room” and parlor, the big kitchen 
with its stone fire-place, and the well-house in the rear 
are in daily use. The log-barn in which they began 
tobacco manufacture has vanished, but their first plank 
factory stands, firm as the day it was finished, built, 
as the present owner points out, of solid timber and 
lumber, put together mainly with wooden pegs. 

Up under the roof of the farm-house is the boys? 
room, which “Buck” and “Ben” occupied as youngsters. 
From the low windows, looking across the yard, can be 
seen the tall steel towers of the high-tension lines, 
transmitting electric current from the water-powers 
they developed, the wires running across the fields 
where they raised their first tobacco. The village 
which was scarcely more than a railway station in their 
childhood has grown into a flourishing city with sub- 
urbs extending in every direction, and not far away is 
the broad campus of Duke University, covering the 
acreage of a dozen plantations. 

A plain country homestead this, like thousands 
through the Carolinas, and its occupants had even 
fewer advantages than the average farmer’s boy. 
\\Coming into the world on December 23, 1856, 
the youngest member of the family was christened 
James Buchanan, in honor of the veteran Pennsyl- 
vanian who had recently been elected President. His 
father, Washington Duke, had been twice married. 
Miss Mary C. Clinton, his first wife, who was the 


19 


JAMES B. DUKE 


daughter of Jesse and Rachel Vickers Clinton, of 
Orange County, N. C., and the mother of his two 
elder sons, Sydney T., who lived to the age of four- 
teen, and Brodie L. Duke, died November 18, 1847. 

Five years later, on December 9, 1852, Mr. Duke 
was married again, to Miss Artelia Roney, daughter of 
John and Mary Roney of Alamance County, who was 
the mother of his three younger children—Mary E., 
who became Mrs. Robert E. Lyon, of Durham; Ben- 
jamin N. and James B., known to his intimates as 
“Buck” Duke, the brothers who, in partnership with 
their father, built up the firm of W. Duke, Sons and 
Company. 

Artelia Roney Duke died on August 20, 1858, when 
her last born was a babe in arms.\\ Her life centering 
in home and family, her keenest regret was that she 
could not survive to see her little ones grow to ma- 
turity. But she left upon them the impress of her 
own high character, her deep sense of duty, and that 
disposition to help others which was her moving spirit. 

“Telia” Roney is remembered by those who knew 
her as one of the prettiest girls in Alamance. Having 
a pleasing voice she sang in the choir at Pisgah Church, 
near her home, and it was there that her future hus- 
band caught his first glimpse of her. Desire to hear a 
favorite Methodist preacher led Mr. Duke to journey 
to the neighboring county. Enjoying the sermon, but 
being even more attracted by the young lady in the 
choir, he was introduced to her that day, soon began 
calling regularly, and before many months rolled by 
had won her heart and hand. Married in the Roney 
home, which stands north of Big Falls, now Hopedale 
Mill, their six years of married life were supremely 

20 


WASHINGTON DUKE, FOUNDER OF THE FAMILY FORTUNES 








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ARTELIA RONEY DUKE, MOTHER OF JAMES B. AND BENJAMIN 





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EARLY DAYS 


happy, and her early death was the family’s greatest 
sorrow. F 

The unknown mothers of well-known men—will 
the world ever realize what a debt it owes to them? 
The younger Dukes had hardly the faintest recollec- 
tion of their mother, their only knowledge of her being 
gained from what their father and relatives told them. 
They knew that she was a woman of unusual attrac- 
tiveness, of superior qualities of mind and heart; that 
she came of the Roneys and Trollingers, families iden- 
tified with the county from its earliest settlement; that 
she had given her life to her children, who had inher- 
ited from her some of their best characteristics. But 
they had not even a picture of her. 

She had been lying more than half a century in the 
country graveyard beside Haw River before they found 
a likeness of her. After long search a quaint daguerreo- 
type, discovered in the home of a Trollinger descend- 
ant, was identified by her one surviving brother, who 
said, “Surely, that’s Telia,” as he looked upon the long- 
vanished face. That faded picture was treasured by 
her sons as one of the few links binding them to their 
mother. 

Erecting at Elon College, as a tribute to her mem- 
ory, a handsome Science Building bearing her name, 
they installed in the place of honor an oil painting of 
Artelia Duke, reproduced from that ancient daguerreo- 
type resurrected after so many years. 

His mother passing away before his remembrance, 
James’ affections turned to his father, whose homely 
maxims, to the end of life, he never tired of quoting. 

“My father told me never to start any job I didn’t 
intend to finish,” he would remark in a business con- 
ference where millions were involved. 

21 


JAMES B. DUKE 


“My daddy wouldn’t have done that, and I won’t 
do it either,” was his frequent comment in turning 
down some proposition not considered sound. 

Valuing more than any other part of his inheritance 
the eminent common sense and unfailing consideration 
of the parent who, amid difficulties and hardships, had 
literally dug his living out of the soil and laid the 
foundation of the family fortunes, his father held first 
place in his heart. 

A man of unusual force and strong character, Wash- 
ington Duke, born December 20, 1820, in the Bahama 
section of Orange, that is now part of Durham County, 
was the son of Taylor Duke, whose family had settled 
originally in Virginia. His mother, before her mar- 
riage Miss Dicie Jones, was from Granville, a neigh- 
boring county. Of English and Scotch-Irish blood on 
his father’s side, his mother of Welsh descent, Mr. 
Duke came of sturdy, God-fearing people, the pioneer 
stock which settled the Southern colonies and set their 
stamp upon its civilization. 

Looked up to and respected by his neighbors, Tay- 
lor Duke was a man of standing in his community. 
One evidence of this was his election as captain of the 
militia, then quite an honor. “Muster days” were 
great occasions when the volunteer soldiers gathered 
for review. The War of 1812 was fresh in the minds 
of men, traditions of the Revolution clustered around 
Hillsboro, the county seat, and there were still living 
those who remembered the Red-Coats of Cornwallis 
and the Continentals who fought at Guilford Court 
House, not far away. Captain Duke must have made 
a brave figure at the head of his company, and this 
was not his only distinction, for he served for many 
years as deputy sheriff, charged with the enforcement 
of law and order. 

22 





i EARLY DAYS 

-Large families were the rule in Eastern Orange, and 
Taylor Duke’s was no exception. He was the father 
of ten children, of whom Washington was the young- 
est. William J., the eldest, died at his home near Dur- 
ham in 1884. Mary, wife of James Stagg, survived 
until 1881. Anna, wife of John Clinton, died in 1848, 
Amelia, wife of James Riggs, in 1846. Kirkland, the 
second son, died in 1864, Malinda, the fourth daugh- 
ter, in 1874. James T., who lived to a ripe old age, 
was a resident of Tennessee. Brodie passed away in 
1844, while yet a young man. Robert died while serv- 
ing in the Confederate army in 1863. Washington, 
last-born of the ten, reached the age of 84, his long 
life ending on May 8, 1905. 

With such a large flock to provide for, every mem- 
ber of the family was used to hard work from child- 
hood. They did not mind that, for all farmers’ chil- 
dren worked, except those of the few big planters who 
had slaves by the score. 

The Dukes were far from rich, and there were times 
when it was not easy to “get along.” But their neigh- 
bors were no better off, many of them not so fortunate. 
Owning their land, they grew wheat and corn sufficient 
for food and provender, and enough cotton and to- 
bacco to bring in a few dollars in the fall. Their cows 
furnished milk and butter in abundance.) The women 
folk raised flocks of chickens, and turkeys to grace the 
table at Thanksgiving, Christmas or when the minister 
came to visit them. Pigs were fed from the crib and 
kitchen, furnishing pork and hams, and at “hog killing” 
time the neighborhood reveled in hog and hominy, pig 
jowls and turnip salad, lights, liver and “hasslets,” as 
well as hams and bacon. 

Money was scarce and clothing by no means plenti- 
ful. There was little to spend on luxuries or personal 


23 


\, ? 
JAMES B. DUKE 

adornment.» Men of means had their broadcloth suits 
and beaver hats, their wives and daughters silks and 
satins; but these were rare and kept for occasions. 
Ready-made clothing was unknown. On the spinning 
wheels in nearly every farm-house housewives spun the 
yarn from cotton picked from their own fields and wool 
sheared from their own sheep, which was woven into 
cloth on hand-looms, or knit into stockings and com- 
forters by the busy hands of women whose needles sel- 
dom rested. Men wore the stout brown “butternut,” 
and women cotton homespun in summer and the 
warmer woolens in winter time. 

Plowing, hoeing, sowing wheat, cultivating corn, cot- 
ton or tobacco, laboring in the fields, farmers worked 
in their shirt-sleeves, wearing the oldest trousers they 
possessed. ) Tailors and dress-makers plied their trade 
in the larger towns, but they were patronized almost 
entirely by the wealthy. Women in the country made 
their own clothes and those of their men folk, as they 
had since colonial days. “Store bought” goods were 
rarities, valued highly and carefully cut and sewed, 
when they could be afforded. Outworn suits of fa- 
thers were “made over” for boys, and mothers’ dresses 
were turned and reduced for the girls. Some boys 
hardly knew what it was to have a new suit until they 
were almost grown. 

Luxuries were few and amusements, as the boys and 
girls of our day know them, almost non-existent. But 
there was plenty to eat and enough to wear, and no 
one suffered for lack of food or clothing. 

‘ Work from dawn to dusk was the daily portion. 
There was no eight-hour day for the farmer boy. 
Wakened before dawn, there were horses and mules, 
cattle and hogs to feed and water, wood to chop, fires 
to kindle, numerous chores to be done. Breakfast by 


24 


EARLY, DAYS E 


candle-light, for gas and electricity were still far in 
the future, and even the oil lamps, burning “kero- 
sene,” were not in use until years later. Into the 
fields at the crack of day, following the plow or han- 
dling heavy hoes until noon, when the blast of the 
dinner horn called them to the mid-day meal. Labor- 
ing away all the long, hot afternoon, until the last light 
died away. Feeding cattle and stock, milking the cows, 
looking after barns and corn-cribs, bringing in water 
and wood. Supper served hot, with biscuits and corn- 
bread, fried meat, buttermilk and potatoes—wholesome 
food for hungry men. 

The strenuous day ended, they were ready enough 
for bed, and sound sleep. “Early to bed and early 
to rise”? was no mere maxim but a rule of life.) If it 
did not make boys wealthy and wise, it did promote 
health and inure strength and endurance. 

On such a farm, some twelve miles from Hillsboro, 
Washington Duke was reared. | There were not many 
advantages, educational or otherwise, for youngsters in 
that region. Schools were few and far between. Most 
of them were rude log houses, where classes were 
taught for two or three months in winter or spring, 
when the pupils were not employed in the fields. 
Competent teachers were rare, and instruction princi- 
pally confined to the three R’s. If a boy could read 
and write and “figure” fairly well, that was sufficient. 
Private schools, good ones in some of the towns, ex- 
isted, but they were mainly for the children of the 
well-to-do. Here and there an “academy” which ran 
to Greek and Latin gave some grounding in literature 
and history. But there was scarcely what could be 
termed a public school system. Frowning upon “free 
schools,” the wealthier property-owners resented even 
the insignificant taxes levied for their support. As for 


25 


JAMES B. DUKE 


higher education, a poor boy might get that as best he 
could, Some did make their way through academy and 
university, by slaving and sacrifice, but the vast ma- 
jority did not consider it worth the struggle. 

A few colleges, of more or less merit, existed, but 
they were, as a rule, struggling institutions with small 
attendance. Going to college was beyond the dreams 
of the average youth. North Carolina possessed a 
flourishing university, the oldest State institution of the 
kind, established soon after the Revolution. That was 
at Chapel Hill, less than a day’s drive from the Duke 
home. But it might have been a thousand miles away, 
so far as Taylor Duke’s sons were concerned. They 
could not afford to go there, or afford the high-school 
training necessary for entrance. Philosophers tell us 
that men value most things they do not possess or those 
of which they have been deprived. Perhaps it was this 
remembrance of the sparse opportunities of his boy- 
hood that led Washington Duke, when fortune fa- 
vored him, to give so liberally to education. 

Learning little from teachers, spending not more 
than six months of his life in school, he was not un- 
educated, if education means knowing things worth 
while; for he acquired a vast fund of practical knowl- 
edge that is not found in books. Laboring with his 
brothers on the farm, he grew to manhood with a 
heritage of clean blood, a strong physique, a capacity 
for clear thinking, and the courage that surmounts dif- 
ficulties. 

As an early History of Durham described his educa- 
tion, he was “graduated with high distinction at the— 
Plow Handles, an institution which is the bone and 
sinew of our great republican nationality; an institu- 
tion upon which the perpetuity of our greatness as a 
people is based, and from which our greatest men have 

26 


EARLY DAYS 


come to bless the world, and leave behind them a halo 
of imperishable glory.” 

If that is too high praise of the plow-handles, it is 
not too high a commendation of men like the elder 
Duke, for these sons of the soil, from Abraham Lin- 
coln down, have been the country’s mainstay and de- 
pendence. And the farmer and manufacturer had 
about him much of the rugged strength of character 
and homely wisdom which distinguished the great War 
President. 

Like the prophets of old, the fear of God was in 
his heart. Religion a vital thing to him, a part of his 
daily life, he was devoted to his church and its min- 
isters. 

“My old daddy always said,” James Duke often re- 
marked, “that if he amounted to anything in life it was 
due to the Methodist circuit riders who frequently vis- 
ited his home and whose preaching and counsel brought 
out the best that was in him. If I amount to anything 
in this world I owe it to my daddy and the Methodist 
Church.” 

In the year 1827, earlier chronicles relate, a pale- 
faced, timid boy of seven made his way into the old- 
fashioned Methodist chapel near his home, and joined 
the Sunday School at “Mount Bethel.” Finding there 
the inspiration of earnest teachers, the companionship 
for which he hungered, he made friendships which 
lasted through life. 

To encourage regular attendance the teachers pre- 
sented each pupil a card, bearing some verse of scrip- 
ture. Mr. Duke was fond of recalling, long years 
after, the first card he received. ‘Remember thy crea- 
tor in the days of thy youth” was the inscription, in- 
delibly impressed upon his mind. 

Three years later, at the age of ten, he was con- 


27 


JAMES B. DUKE 


verted at a revival service, and joined the Methodist 
Church. His father and mother being serious-minded, 
devout Methodists who seldom missed a service, to 
their children, as well as themselves, Mount Bethel 
was the brightest spot in their existence. 

The social as well as religious center of the neigh- 
borhood, the country church was the gathering-place 
of residents for miles around. There they met on Sun- 
days not only to hear the preacher and join in the songs 
of Zion, but to exchange the news and gossip of crops, 
politics and neighborhood happenings. “Quarterly 
meetings,” revivals and camp meetings were events to 
be looked forward to, and afterwards remembered. 

Going to church was something no country boy or 
girl would willingly miss. Father, mother and chil- 
dren piled into the buggies and wagons, dressed in their 
Sunday best—“go-to-meeting clothes” the negroes 
termed them—and however the boys might shift along 
in one-gallus trousers, plowing during the week, and 
the girls wear slat sun-bonnets and faded ginghams at 
their house-work, on Sundays they were decked out in 
the best they could afford. Sunday school was a weekly 
affair, but few churches could have preaching even 
every other week. Oftener, it was once a month. 
Churches were widely separated. Some circuits em- 
braced almost an entire county. 

“Circuit rider” was no idle designation for Metho- 
dist ministers a century ago. Many times they rode 
twenty or thirty miles to fill appointments. Few of 
them could afford buggies or teams. A familiar sight 
was the gaunt itinerant, mounted on a raw-boned 
horse, his personal belongings and books in his saddle- 
bags, and his Bible in his hand. 

“Mighty men of God” were these circuit riders who 
carried the gospel to the rural regions of the Carolinas. 

28 


EARLY DAYS 


Fired with the burning zeal of John Wesley and Fran- 
cis Asbury, they had no shadow of doubt as to their 
mission or belief. Saving souls was the business of 
their lives. Thundering forth their solemn warnings, 
they called sinners to repentance. 

“Ministers” and “clergymen” were not fitting terms 
for them. They were preachers, preaching the simple 
gospel handed down from Calvary, “Christ and Him 
crucified”; speaking with authority, and not as the 
scribes. 

Born orators, preaching with a fire and force that 
were compelling, ministers and laymen alike would 
have scorned one who “read his lines.” Most of them 
had never written a sermon in their lives. Unlearned 
as they may have been in letters and theology, they 
knew the Scriptures and preached religion, undiluted 
and undefiled. 

Their congregations held the same strenuous belief. 
Religion was one of the chief concerns of daily life. 
The Bible was their guide and comforter; many read 
it “from cover to cover” every year. Lots of passages 
were hard to understand, of course, but they believed 
every word of it, from Genesis to Revelations. Re- 
ligious experience was not foreign to them. Oppressed. 
by the sense of sin, they “wrestled with God.” A man 
knew when he was forgiven, at peace with his Maker. 
“Conversion,” turning from sin to righteousness, was 
as real as any event of existence. Parents were not 
satisfied until their sons and daughters were “brought 
to God.” 

How the rafters rang, when the preacher gave out 
the hymn and some ardent brother lifted the tune! 
There was no choir in those days, no organ to swell 
the note. But when the congregation joined in sing- 


29 


JAMES B. DUKE 


ing these stirring hymns, voicing their hopes and fears, 
there was a thrill no paid choir could ever bring. 


“How firm a foundation, 
Ye saints of the Lord!” 


The foundations on which they stood could never 
crumble. 

“Rock of ages, cleft for me”—a refuge it was from 
every ill and care. 

Faith was the basis of their belief, faith in God and 
Man, never lost or shaken, through all the years. Im- 
perfect enough—for they would be the last to pose 
as saints or claim perfection—there was something 
about this “old-time religion” which produced men of 
larger stature and firmer confidence, leading them to 
do more for their fellows. It touched the hearts of 
men and women, and rough and uncultured as many 
were, there dwelt in them an inner light that could 
not be dimmed. Can science or scholarship, higher 
criticism or philosophy compare in strength and com- 
fort with this Faith of our Fathers? 

Washington Duke had this faith, and transmitted 
it to his children, often speaking of these preachers 
and how deeply they influenced his life. Their treas- 
ure, he knew, was laid up in heaven. They had none 
onearth. Scarcely able to exist on their scanty incomes, 
few were able to lay by anything for declining years. 
Old age found them in poverty and want, with no 
means of support. 

In providing for those worn out in ministerial ser- 
vice, for their widows and children, James Duke was 
endeavoring to repay in some measure the debt owed 
to them. Duke University, the funds to provide for 
aged ministers and maintain churches in rural districts 
are monuments to these self-sacrificing itinerants, 


30 


EARLY DAYS 


Reaching the age of twenty-one, Washington Duke 
left his father’s roof to make his own way in the world 
with hardly a dollar of his own. Renting the land of 
others, for four years he was a tenant farmer, then 
managed. to accumulate enough to buy a small tract of 
land. Year by year adding to his holdings, at the out- 
break of the Civil War he owned three hundred acres. 
No small achievement, for the average farm in the 
vicinity then as now was only ninety acres. What he 
accomplished in later years, making millions in manu- 
facturing, was merely applying the same energy and 
enterprise on a larger scale. 

When Mrs. Duke died, in 1858, her sisters, Miss 
Elizabeth Roney, whom the youngsters affectionately 
called “Aunt Betty,” and Miss Anne Roney, came into 
the home to care for the little ones. Supporting a fam- 
ily of a half-dozen was not always easy, hardships were 
not infrequent, but the farmer was doing well in a 
material way, building up a property of some value, 
until war came and almost swept it away. 

Taking an interest in the affairs of the community, 
the Dukes were particularly active in church work. 
William J., Washington’s elder brother, who had been 
converted at a Methodist cross-roads picnic gathering, 
had been walking five miles to church on Sundays, he 
and his wife each carrying a child. Seeking some place 
of worship nearer home, he built a large arbor, of 
leafy boughs over a framework of posts and poles, 
where arbor services and camp meetings could be held. 
For two or three years, possibly more, between 1836 
and 1840, these arbor services continued, William Duke 
entertaining as many visitors as could be accommodated 
in his home, the others camping in the woods around. 
Then, setting aside an acre of land, he built a log 
church called Hebron, more familiarly known as 


31 


JAMES B, DUKE 


Duke’s Chapel. Both arbor and church services were 
conducted by a local preacher who was also a farmer 
and cotton-mill owner, Thomas W. Holden, father of 
William W. Holden, who became Governor of North 
Carolina. Another son, Rev. Lucius M. Holden, was 
later pastor of the congregation. 

The Dukes naturally felt a deep interest in the 
church founded by “Uncle Billy,” who was sometimes 
referred to as “Uncle Billy of the Old Ship,” his fa- 
vorite song being “The Old Ship of Zion.” Attending 
services there in earlier years, they contributed to its 
support continuously, and there is now under construc- 
tion at old Hebron a new Duke’s Chapel which will be 
perhaps the finest country church in the State—a model 
structure of its kind. 

But that was not the only house of worship the fam- 
ily attended. One mile east of Durham, near Wash- 
ington Duke’s home, stood a Methodist Chapel known 
as “Orange Grove.” Organized in 1830 in a school- 
house, as the result of a revival conducted by Rev. Wil- 
lis Haynes and Rev. David Nicholson, five years later 
the building, used jointly for church and school, was 
burned by a miscreant, Jefferson Dillard, who “fled for 
parts unknown.” 

Replaced by a larger chapel, by 1860 this structure 
was also outgrown and the congregation moved to Dur- 
ham, a grove at the edge of the town being purchased 
and a frame building erected. Contributing to its erec- 
tion and support, the elder Dukes were among the stew- 
ards and with their families attended services there. 

The times were exciting. North and South drifting 
apart, there was widespread talk of armed conflict. 
Democrats were divided, Whigs at sea, scarcely know- 
ing where to turn. Buchanan was in the White House, 
but the lately born Republican party, having nominated 


32 





THE OLD HOMESTEAD NEAR DURHAM WHERE JAMES DUKE WAS BORN 


EARLY DAYS 


Abtatind Lincoln for President, was sweeping through 
the Northern States. 

Feeling ran high, politics were discussed wherever 
men gathered, and could not be kept out of the 
churches. Secession was the burning issue. The Lin- 
coln and Douglas debates fresh in the public mind, 
citizens were eager to hear both sides of the question. 

‘The Methodist chapel in Durham was the scene of a 
notable debate. The orators themselves were eminent 
enough to attract any audience. On one side, advocat- 
ing the preservation of the Union, was William A. 
Graham, who after serving as governor and United 
States senator, had been Secretary of the Navy in Presi- 
dent Fillmore’s cabinet, and had been nominated eight 
years before for Vice President, on the ticket with Gen- 
eral Winfield Scott. Opposing him was Henry E. 
Nash, an eloquent speaker and ardent advocate of seces- 
sion. A contest memorable but indecisive. 

The congregation was divided. Rev. J. B. Alford, 
the pastor, and a majority of the Methodists were fiery 
secessionists, the Dukes and others strong for the 
Union. A trying time, with neighbors at odds, families 
disagreeing, the entire community seethed with discus- 
sion, and over all was the shadow of what many even 
then were terming the “irrepressible conflict.” 


33 


CHAPTER TWO 
In the Sweeping Tide of War 


ORTY-ONE years old at the outbreak of the Civil 
War, believing firmly in a united country, Wash- 
ington Duke looked upon the disruption as needless 
strife, a deplorable struggle that could end only in dis- 
aster. Up to that time a consistent Democrat, naming 
his youngest son for a Democratic President, he was 
deeply and conscientiously opposed to secession, as were 
not a few of his fellow citizens, including men of 
prominence. 

North Carolina was one of the last of the Southern 
States to secede, and it was at Raleigh, not many miles 
from his home, that the Ordinance of Secession was 
adopted on May 20, 1861. 

Not in sympathy with the Confederacy or approving 
armed resistance, when called Mr. Duke responded 
and did his part as a private in the ranks. Going into 
the army meant the breaking up of his home. The 
oldest son, Brodie, entered the Confederate service. 
But the others, “Ben” and “Buck,” and his daughter 
Mary, were too young to have anything to do with 
war. There was no one to keep the farm going or care 
for the children at the home place. So they were sent 
to their Grandfather Roney’s, in Alamance County, 
to be cared for by aunts, grandparents and their colored 
nurse. Opposed to slavery, Mr. Duke owned one 
slave, a girl named Caroline. Serving in the home, she 
assisted in “looking after” the children, and remained. 
with them during the war. 

Entering the Confederate army in 1863, Mr. Duke 
was sent to Camp Holmes, and placed on guard duty. 
Transferred to the navy and ordered to South Caro- 
lina, he served on a ship which was one of the defenses 


34 


IN THE TIDE OF WAR 


of Charleston harbor, taking part in the heavy bom- 
bardments at James Island. Thus for a time he was 
in sight of the spot where the firing on Fort Sumter 
precipitated the War between the States. 

Later again transferred, this time to the artillery, 
he was sent to Virginia and attached to Battery Brook, 
one of the defenses of Richmond, near Drury’s Bluff. 
Becoming an expert gunner, he was placed in charge 
of a battery and promoted to orderly sergeant. Serv- 
ing there until the city was abandoned, he filed south 
with his ragged comrades as they watched the burning 
capital of the Confederacy, and not so fortunate as the 
majority, was captured by the Federals and sent to 
Libby Prison. But a few weeks later, after Lee sur- 
rendered at Appomattox and the bloody struggle 
ended, he was released from captivity. 

Transported to North Carolina, but to a point no- 
where near his own locality, he was sent by the Federal 
authorities to New Bern, in the southeastern part of the 
State. Deposited there with no money or means of 
transportation, walking was the only way to reach 
home, and he walked the entire distance, 135 miles. 
Going on foot from town to town, foraging for food, 
sleeping wherever night overtook them, the discharged 
Confederates made their way as best they could. Im- 
poverished, many families in dire need, the farmers 
along the way were kind enough to the soldiers, ready 
to divide their last crust with the veterans; but it was a 
long and weary march for the war-worn “Tar Heels.” 

The Duke youngsters had led a quiet existence while 
their father was in the army. Ben and Buck were 
sturdy little fellows, popular with playmates, and their 
sister Mary, those who knew her say, “was as fine a 
girl as ever lived.” The boys were kept busy doing 
chores around the house, barns and stables, and help- 


35 


JAMES B. DUKE 


ing in the fields, while Mary was occupied with house- 
hold affairs. All three attended school in winter, going 
first to the log schoolhouse at Harden’s and later to 
Pisgah Church, where school was held. 

“Many’s the time I played bull-pen with Ben and 
Buck,” recalls F. P. Rogers, one of their schoolmates, 
who at 75 was still keeping the neighborhood general 
store. “How they would duck and dodge to keep from 
being hit by the ball!” 

Buck was “pigeon-toed” in his youth, Mr. Rogers 
relates, and this handicap often caused him to get hit 
in the game, which was great fun for the other players. 
He had to wear special shoes, which were made for 
him by De Shavers, a half-breed Indian, who made 
most of the shoes worn in that section. “My, they 
were rough, hard shoes to wear!” exclaimed Mr. 
Rogers, who recalled that Buck later had his feet cor- 
rected by surgery and had as firm a footing as any of 
them. 

Impatient to get things done, Buck even in childhood 
was inclined to hurry the process. One incident that 
occurred when he was a little fellow was a standing 
joke in the family. Raising chickens was one of his 
occupations. An old hen that was his special care had 
been “setting” for an unconscionably long time, and 
when at last the eggs began hatching, there was a ter- 
rific squawking in the barn-yard. Out his aunts ran, to 
learn what was the matter. There was Buck, hatless 
and breathless, battling with the enraged mother. The 
biddies not emerging rapidly enough for him, he had 
taken the hen from her nest and was plucking off the 
egg-shells, lifting out the chicks as fast as he came to 
them. 

“You'll kill the poor little things,” he was told. 
Surprised and penitent, Buck explained that he was 


36 


BENJAMIN N. DUKE 





Ant 





IN THE TIDE OF WAR 


just “helping them get out.” But that was his last 
attempt to interfere with a setting hen. 

Growing tobacco in summer, attending chan in 
winter, school-boy games, going to church on Sunday, 
visits to the neighbors and occasional trips to town were 
their only recreations, But life was not without its 
hardships. 

War had cast its shadow over this region, as it had 
over the entire South. Practically all the able-bodied 
men and many boys hardly big enough to hold a gun 
had gone to the front. Only the old folks, women and 
children were left. North Carolina, with a military 
population of 115,000, had furnished more than 
125,000 troops to the Confederacy. The losses had 
been terrible. Nearly every family was in mourning 
for some son or father who had fallen. 

The conflict had been to most of them a mysterious, 
far-off thing, the nearest battlefields, until near the 
end, being in Virginia or Tennessee. But before the 
strife was over the residents of this section were to see 
soldiers by thousands, feel the thrill of marching regi- 
ments, and, as well, get a taste of the destruction that 
follows in the wake of moving armies. For big events 
revolved around Durham. Its vicinity was the scene 
of Johnston’s surrender to Sherman, the final collapse 
of the Confederacy. 

Having marched through Georgia to the sea, Sher- 
man swept his way through the Carolinas, moving 
toward Virginia to form a junction with Grant’s army. 
But the fall of Richmond and Lee’s surrender changed 
his plans. Johnston, with his army of 30,000 giving 
battle at Bentonsville, fighting stubbornly at every 
step, was the only opposing force remaining. Sherman 
turned toward Johnston, who had fallen back on 
Raleigh to protect the State capital, Outnumbered, 


37 


JAMES B. DUKE 


the Confederates retreated toward Hillsboro, passing 
within a few miles of the Duke farm. Occupying 
Raleigh, Sherman sent Kilpatrick, with his cavalry, in 
pursuit. 

Jefferson Davis and his cabinet, driven from Vir- 
ginia, had taken refuge in Greensboro, fifty miles away. 
As the Federals approached the capital Governor 
Zebulon B. Vance sent peace commissioners, under a 
flag of truce, to treat with Sherman. On the same day 
Johnston was summoned to Greensboro to confer with 
President Davis. Seated around the conference table 
were Judah P. Benjamin, Secretary of State; S. R. 
Mallory, Secretary of the Navy; John H. Reagan, 
Postmaster General, and General P. G. T. Beauregard. 
Knowing conditions were desperate, Johnston presumed 
he had been called to consider the best way to end 
hostilities. He was amazed when Mr. Davis declared 
that he would, in two or three weeks, have a large force 
in the field, proposing to call out all the enrolled men 
whom the Conscript Bureau had been unable to bring 
into the army. 

Secretary of War Breckenridge arrived a few hours 
later, confirming the rumors of Lee’s surrender. 
Mr. Davis immediately called a second conference. 
Johnston urged making overtures for peace at once. 
The Confederate President asked the members of his 
Cabinet for their opinions. Breckenridge, Mallory and 
Reagan, General Johnston relates, “thought the war 
was decided against us, and that it was absolutely neces- 
sary to make peace.” But Secretary Benjamin violently 
opposed such action, making a fervid speech for con- 
tinuing the war. Mr. Davis hesitated to attempt over- 
tures, feeling that the Federal Government would 
probably reject any terms he might offer, but finally 


38 


IN THE TIDE OF WAR 


consented to permit General Johnston to initiate ik 
tiations with Sherman. 

Replying promptly, Sherman proposed an armistice 
on the same terms which Grant had offered Lee at 
Appomattox. Delayed in transmission, the message 
did not reach Johnston until the 16th. General Wade 
Hampton then arranged an interview between the com- 
manding generals, to take place half way between the 
picket lines of the two armies. 

Though providing for surrender of military forces 
and the ending of the Confederacy, the terms proposed 
by Johnston, to which Sherman gave favorable con- 
sideration, were liberal, guaranteeing protection of 
Southern citizens in their political and property rights, 
and granting immunity from prosecution or penalties 
for participation in the war. Had these terms been 
accepted, the hardships and terrors of “Reconstruction” 
might have been avoided, bitter hatreds abated, and 
history changed for a generation. But at that very 
moment a tragedy occurred which horrified the country 
and prevented any concessions to the stricken South, 
any treatment save that of a conquered enemy. ‘That 
was the assassination of President Lincoln. 

There is no more graphic story of these events, re- 
counted in Dr. Boyd’s history of Durham, than is given 
by General Sherman himself in his “Memoirs”: 


“T ordered a car and locomotive to be prepared to convey 
me up to Durham’s at eight o’clock of the morning of the 
17th. Just as we were entering the car, the telegraph opera- 
tor, whose office was upstairs in the depot building, ran down 
to me and said that he was at that instant of time receiving a 
most important dispatch in cipher from Morehead City, which 
I ought to see. JI held the train for nearly half an hour, 
when he returned with the message translated and written out. 
It was from Mr. Stanton, announcing the assassination of Mr. 


39 


JAMES B. DUKE 


Lincoln, the attempt on the life of Mr. Seward and son, and 
a suspicion that a like fate was designed for General Grant 
and all the principal officers of the government. 

“Dreading the effect of such a message at that critical in- 
stant, I asked the operator if any one besides himself had seen 
it; he answered no. I then bade him not to reveal the contents 
by word or look till I came back, which I proposed to do the 
same afternoon. ‘The train then started, and, as we passed 
Morris Station, General Logan, commanding the Fiftieth 
Corps, came into my car, and I told him I wanted to see him, 
as I had something very important to communicate. 

“We reached Durham’s, 26 miles, about 10 A.M., where 
General Kilpatrick had a squadron of cavalry drawn up to 
receive me,” said General Sherman. “We passed into the 
house in which he had his headquarters, and soon after 
mounted some horses, which he had prepared for myself and 
staff. General Kilpatrick sent a man ahead with a white 
flag, followed by a small platoon, behind which we rode, and 
were followed by the rest of the escort. We rode up the 
Hillsboro road for about five miles, when our flag-bearer dis- 
covered another coming to meet him. They met, and word 
was passed back to us that General Johnston was near at hand, 
when we rode forward and met General Johnston on horse- 
back, riding side by side with General Wade Hampton. We 
shook hands and introduced our respective attendants. I asked 
if there was a place convenient where we could be private, and 
General Johnston said he had passed a small farmhouse a 
short distance back, when we rode back to it side by side, our 
staff officers and escorts following. 

“‘We soon reached the house of a Mr. Bennett, dismounted, 
and left our horses with orderlies in the road. Our officers, on 
foot, passed into the yard, and General Johnston and I entered 
the small farmhouse. We asked the farmer if we could have 
the use of his house for a few minutes, and he and his wife 
withdrew into a small log house, which stood close by.” 


This house, a log and timber structure, at the forks 
of the road, three and a half miles from Durham, 


40 


IN THE TIDE OF WAR 


stood, an interesting landmark, until 1921, when it was 
destroyed by fire. Only the chimneys and foundation 
remain, but the spot has been marked by a bronze tablet 
bearing this inscription: 


THE BENNETT HOUSE 


Generals J. E. Johnston and Sherman met here at noon 
April 17, 1865, to discuss terms of surrender. They met in 
this house again on April 18 and wrote and signed a “Basis 
of Agreement.” President Johnson rejected the terms and 
sent orders to Sherman to give Johnston till the 24th or resume 
hostilities. 

On the evening of April 25, Gen. Johnston asked for an- 
other interview with Sherman. 

On the 26th at 2 P.m. the Generals met in the Bennett 
House and signed the terms of a “military convention” under 
which 36,817 Confederate soldiers in North Carolina and 
52,453 in Georgia and Florida laid down their arms. 


What strange turns events take! It was William T. 
Sherman, most feared and hated of Northern generals, 
who in this cabin signed the “Basis of Agreement,” 
proposing the restoration of the Southern States to the 
Union, and favorable treatment of their people. In 
this General Sherman believed he was carrying out the 
policy of Lincoln who, he said, had, in numerous let- 
ters and telegrams, urged him to make terms with civil 
authorities, governors and legislatures. But Lincoln 
lay dead in Washington, stricken down by the bullet of 
John Wilkes Booth. The reins of government were 
in other hands. Public sentiment in the North was so 
aroused that even a Southern-born President could not 
stem the tide. The Executive who, under a compul- 
sion that was irresistible, rejected these liberal terms 
and rebuked Sherman for submitting them, was 
Andrew Johnson, a native of North Carolina, born and 


41 


JAMES B. DUKE 


reared in Raleigh, within a stone’s throw of Sherman’s 
headquarters. 

While the armies were camped around, and these 
eventful happenings were taking place so near their 
home, the Duke boys were miles away. The foraging 
soldiers raided their farm, sweeping it clean of food 
and provender, taking off everything they thought 
worth carrying away. But the boys were not there. 
They were at Grandpa Roney’s up in Alamance, and 
missed all the excitement. As Benjamin recalled, long 
afterward, “We never saw the Yankees.” 

They had troubles enough of their own. The fall 
of Richmond meant less to them than did the fact that 
their father had been captured in the retreat from that 
city. Later they learned he was in Libby Prison, and 
though in time released, there were weeks of waiting 
before his children could greet the parent from whom 
they had been separated for two years. 

Dark days these were for every one. Sorrow over 
the fall of the Confederacy was mitigated, however, by 
the fact that the war was over. Wives, mothers, chil- 
dren with thankfulness and tears of joy welcomed 
home their loved ones who had been so long exposed 
to its perils. The shadow of death was at last lifted. 
Poverty stricken, the Dukes and their neighbors were 
glad to be alive, able to return to the pursuits of peace. 

Food was by no means plentiful, clothing had been 
patched and mended as long as it would hold together. 
Sugar wasararity. Some children, like the Dukes, had 
almost forgotten the taste of it. Coffee had long since 
passed from the family tables, only the richest being 
able to afford this luxury. The poor drank chickory as 
a substitute, and “sassafras tea,” made from the roots 
of the sassafras shrub. 

Neither the returning soldiers nor the civilian popu- 


42 


IN THE TIDE OF WAR 


lation had any money. Long before hostilities ended 
Confederate currency had declined until $500 was re- 
quired to buy a $30 cow, a pair of boots or a silk dress 
cost $1,000 and sugar and coffee went as high as $100 
a pound. Following the surrender the currency was 
absolutely worthless, as were also the Confederate 
bonds, in which men of means had invested mil- 
lions. The banks, their funds invested in Confederate 
and State bonds, their deposits in Confederate money, 
all failed. There was no stable currency, and prac- 
tically no capital. 

The armies had swept live-stock from the planta- 
tions, commandeering horses and mules for cavalry 
and transport service, cattle, hogs and sheep for food 
for the troops. On some farms there was hardly a 
chicken left. The slaves were freed, and in their new- 
found freedom were naturally not inclined to work. 
The accustomed labor supply gone or reduced to a frac- 
tion of its former effectiveness, cotton culture was for 
the time being impracticable. 

Some crop that could be raised without any great 
amount of labor was sought by farmers, some industry 
which did not require large capital by business men. 
Tobacco answered both requirements, and proved their 
salvation. 


43 


CHAPTER THREE 


From Log Barn and Covered Wagon to Great Factories and 
World Trade 


wo blind army mules which had been given him 

and fifty cents in cash constituted Mr. Duke’s 
entire working capital when the war ended. A five- 
dollar Confederate note had been swapped with a 
Yankee trooper for the precious half-dollar. 

Better off at that than many of his neighbors, for 
hungry, footsore, almost in rags, service in the army 
had not broken his physique or spirit, the head of the 
family accepted conditions as they were and set at work 
to better them. ; 

Gathering his children together, he brought them 
back to the home place. But his farm had been sold 
on credit to a neighbor, the purchaser could not pay for 
it and would not be ousted. Months elapsed before the 
owners regained possession. In the meantime a work- 
ing agreement was made with the occupant by which 
the Dukes resumed farming, receiving a share of the 
crops and some return for their labor. 

Room for Mary, the daughter, was provided in the 
farm-house; but there was no space for the others in 
the dwelling, still occupied by the purchaser and his 
flock, so the boys, “Buck” and “Ben,” and their father 
slept in an outbuilding on the premises, rigging up 
temporary living quarters. 

The farm had been stripped of almost everything 
that could be used or sold, but one thing the greedy 
soldiers had overlooked—a quantity of leaf tobacco. 
The only commodity visible that could be converted 
into money or bartered for supplies, before this could 
be disposed of to advantage it must be put into form 
for smoking. On the premises was a log barn, sixteen 


44 





LOG BARN THAT WAS THE DUKES’ FIRST FACTORY 





DURHAM PLANT THAT MADE CIGARETTES BY MILLIONS 





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LOG BARN TO FACTORIES 


by eighteen feet. Here the Dukes set up their first 
“factory.” Having no machinery, father, children and 
all hands worked at the task. Beaten with flails, the 
pulverized leaf was sifted and packed in bags. There 
was nothing fine or fancy about the manufacture or 
packing, but it was sound, honest tobacco that made a 
good smoke, and the amateur manufacturers, creating 
a brand of their own, boldly labeled their bags ‘Pro 
Bono Publico”—For the Public Good. 

Selling it was the next problem. Loading the “Pro 
Bono” into a covered wagon, the Dukes set forth on 
their first business trip. No millionaire could have 
been prouder of his Rolls-Royce than they were of 
this ramshackle old wagon in which they journeyed 
by day and slept at night, their itinerant home and 
store. 

Drawn by the blind mules Mr. Duke had brought 
back from the army, the wagon carried, besides the 
smoking tobacco, duly packed and labeled, two barrels 
of flour. Attached at the rear was a “victual box,” 
with a frying pan, tin plates and cup, a side of bacon, 
one bushel of meal and some sweet potatoes; for the 
travelers had to camp where they could, and cook their 
own meals. Blankets, water buckets, and fodder and 
corn for the mules completed the outfit. 

Heading for the southern part of the State, where 
tobacco was scarce and in demand, making their way 
through the country, they traveled from place to place, 
selling at the cross-road stores, on farms and in vil- 
lages. Proving good salesmen, the amateur merchants 
did well along the route. When buyers could not pay 
cash, things that could be used or sold were taken in 
barter. At any rate, the adventurers drove a trade, 
and better still, were gaining friends and customers. 

When meal time came, the frying pan was gotten 


45 


JAMES B. DUKE 


out, pones of corn-bread made, bacon and sweet po- 
tatoes fried and, with appetites sharpened by life in the 
open air, they enjoyed every mouthful. 

The tobacco being readily sold, with the money re- 
ceived a quantity of bacon was bought. Exchanging 
the barrels of flour for two hundred pounds of cotton, 
which were sold at Raleigh, Mr. Duke brought home 
as a present for the children what was a rare luxury to 
them—a bag of brown sugar. Hardly tasting sugar 
for months, the only substitute they had was molasses 
or sorghum, known as “long sweetening,” and scarce 
enough at that. 

Pouring the sugar into a bucket, placed in the middle 
of the room, the children, spoons in hand and poised 
for the attack, were invited to “go to it.” Gathered 
around the bucket, sitting flat on the floor, they pitched 
into the sugary mass ravenously. “Buck” ate more 
than his share, so much, in fact, that it “lasted him for 
life.” Caring nothing for sweets in later years, he 
traced his aversion to the overdose of sugar when his 
father brought back the “treat.” 

This initial trip proved so successful that Mr. Duke 
and his sons decided to go into tobacco manufacturing 
as a business. “Buck,” then eight years old, “going on 
nine,” was as deeply interested in the enterprise as 
were his older brothers. Though hardly waist-high 
beside his father, he was taking an active part in the 
work on the farm and in the barn where they beat out 
their tobacco. So was Ben, two years older. Growing 
up together, these lads were more than brothers. Life- 
long partners, they were bound in close association by 
ties that were never broken. 

Mary, the only daughter, who later became the wife 
of Robert E. Lyon, was but twelve years of age when 
they returned from Alamance. But, having learned a 


46 


LOG BARN TO FACTORIES 


lot about cooking and household affairs at Granny 
Roney’s, she insisted on doing her share, and soon be- 
came the recognized housekeeper, succeeding so well 
that father and brothers left home matters in her 
hands and gave their undivided attention to the farm 
and factory. 

Brodie Duke, the eldest son, returned from the war 
like his father, ragged and penniless. Visiting his 
Uncle William, he found that relative in the depths, 
“terribly mournful.” 

“Well,”? said Brodie, “what are you worrying 
about?” 

“We're ruined,” his uncle told him. “Haven’t a 
thing left. The Yankees have driven off the stock, 
carried off all the stuff fit for anything on the place, 
and the land hasn’t been worked in two years.” 

Seeing a raw-boned horse some soldier had discarded 
and a decrepit army mule grazing in the tall grass, 
Brodie inquired: 

“FYow about that horse and mule out there?” 

“Oh, shucks,” Uncle William said. “Those old 
bags-o’-bones couldn’t do any work.” 

Hunting around, Brodie found enough bits of har- 
ness to piece together. Under the barn shelter was a 
battered wagon the Yankees had failed to commandeer. 
Not much of a vehicle; but, hitching the bony animals 
to the battered “‘carryall,” they had at least a team. 
Providing for the younger children was task enough 
for his father. Brodie, being old enough to shift for 
himself, proposed to join forces with his uncle in farm- 
ing the land, dividing the crops. That arrangement 
was satisfactory to both and they went into partner- 
ship “on shares.” 

Getting decent clothes was a problem. The tattered 
Confederate uniform Brodie wore, ingrained with dirt, 


47 


JAMES B. DUKE 


was fast falling to pieces. There was no money to 
buy another. Finding in a closet a suit that had be- 
longed to a cousin killed in the war, Brodie scrubbed 
and pressed the coat and trousers, burned the remnants 
of his old uniform and donned his first presentable 
outfit since leaving the army. 

Late in planting, they raised a fair crop, sufficient to 
buy another team and wagon; but scant surplus was 
left. Six barrels of corn and three of flour was the 
total Brodie reaped for the season’s work. Seeing no 
prospect of making money farming, he joined his 
father and brothers in manufacturing tobacco. 

Deciding a real factory was necessary, they pro- 
ceeded to put up one. Twenty by thirty feet in size, 
that was also built of logs, but afforded better facilities. 
This was soon outgrown, and an abandoned house 
which had been used as a stable was utilized. As trade 
increased, a more impressive and convenient structure 
was erected, a frame house designed for and adapted to 
manufacture. The new building compared favorably 
with the tobacco factories which were operated on many 
farms in that part of the Carolinas and which, before 
the war, made mostly plug tobacco, before the industry 
was concentrated in cities and’towns. Negro boys with 
hickory sticks “beat out” the leaf, which was packed in 
home-made bags. Later crude machinery was in- 
stalled, and packages and product made more attractive. 

Prospering from the beginning, the Dukes in 1866 
manufactured 15,000 pounds. Revenue taxes were 
high, following the war, but tobacco brought thirty to 
forty cents a pound, yielding a substantial profit. By 
1872, selling 125,000 pounds a year, they had become 
factors in the local industry, and the junior member 
of the family was “cutting his eye-teeth,” learning the 
trade. 


48 


LOG BARN TO FACTORIES 


Born and reared in the country, he had been familiar 
with farm work from his earliest remembrance. Rid- 
ing horses and driving oxen when hardly tall enough 
to reach to a mule’s back, he liked nothing better than 
“riding to mill,” carrying a bag of corn or wheat and 
bringing back the meal or flour. Waiting while the 
miller ground the grain gave the boy undisturbed hours 
when he could lie on the grass, and meditate on what 
he would do when he grew to manhood, 

Water fascinated him. Watching the stream pour 
over the big wooden wheel, he often longed for a mill 
of his own, with the water flowing by unceasingly. 
This youthful ambition was vividly recalled nearly 
half a century later when he was developing water- 
power on a scale that was unthought of in his boyhood. 

Older residents recall seeing “Buck” Duke, when a 
mere lad, driving into town in a cart drawn by a year- 
ling ox, bite in tobacco and taking back goods and 
supplies. ‘He took to trade like a duck to water,” his 
former townsmen will tell you, and even then was 
entrusted with business transactions. Full of ideas, he 
was constantly seeking new and better ways of manu- 
facturing and merchandising. 

Tobacco was one thing with which he was thoroughly 
familiar. Planting, “priming” and “suckering” the 
growing plants, spending days picking off and killing 
the green worms that were the crop’s worst enemy, he 
had held the long sticks while the laborers cut and slit 
the plants and placed them, heads down, on the sticks 
on which they were hauled to the barns. Gathering 
tobacco, when the broad leaves turned from green to 
yellow with a touch of brown, was a busy time, in which 
the help of every man, woman and child, white and 
colored, on the place was needed. 

Plastered with mud to fill every “chink,” the log 


49 


JAMES B. DUKE 


barns were made as nearly air-tight as possible. The 
barns filled, packed to the roof, tier on tier, the plants 
hanging downward from the rows of sticks resting on 
the rafters, pine wood, cord length, was packed into the 
“flues” beneath and set afire with lightwood knots. 
Once kindled the fires must be kept burning day and 
night until the “curing” was completed. If the blaze 
was once permitted to die down, the tobacco was ruined. 
Piling in wood, keeping up the fires, was one of a 
farmer boy’s duties, until the leaves turned to the 
yellow and brown of “bright” tobacco, and the expert 
curer in charge decided that the plants had the proper 
feel and color. 

Stripping and tying were the next processes, stripping 
the leaves from the brown stalks, and tying them to- 
gether in small bundles—something in which every 
one, from the oldest to the youngest, could join—work 
for rainy days when the leaf was moist and pliable 
enough to handle. 

On the farm and in the factory “Buck” Duke 
learned the numerous details of raising and handling 
tobacco, from burning the “plant beds” and sowing the 
seed, in the spring, to the time the leaf was cured and 
the finished product ground into “smoking” or pressed 
into “plugs.” 

With few associates, even among the neighbors, 
having no holiday but Sunday, when the whole family 
attended church, and no time to play as other boys did, 
work was his pleasure as well as occupation. Thought- 
ful and reserved, with few friends or amusements, he 
grew up disciplined, self-reliant, with an independence 
and initiative which were to serve him well in after 
years. ) 

Traveling from town to town in the covered wagon, 
camping out in the woods or at the edge of villages, 


50 


LOG BARN TO FACTORIES 


when permitted to accompany father and brothers on 
their selling expeditions, gave him the keenest pleasure. 
It was on one of these trips that he met Walter Page. 
As the itinerant merchants parked near Morris Station, 
the mules unhitched and camp arranged for the night, 
students from a neighboring school gathered around 
the wagon. Among them, Col. F. A. Olds, of Raleigh, 
who was in the group, recalls, was Page and it was 
there that they scraped acquaintance. Who would have 
imagined that one of these youngsters sitting around 
the camp-fire would become the largest tobacco manu- 
facturer of his day and another the American Ambas- 
sador to England? 

Buck and Ben, between times in factory and field, 
went to school in Durham, driving into town with their 
books and slates. Attending the Academy, taught by 
Dr. Morgan Closs, a man of parts and learning who 
left his impress on his pupils, the Dukes recalled him 
with sincere affection. Both were bright pupils, and 
Buck could “out-figure any one in his class.”” In fact, 
it was a common saying that, when problems were given 
out, he could “get the answer before the teacher could.” 
Ben, his brother, and others might excel in reading, 
writing or history, but when it came to “figuring out” 
anything, Buck had no equal. 

Wishing both his boys to go to college, Mr. Duke, 
after they had attended several sessions at the Acad- 
emy, sent them and their sister to the excellent school 
at New Garden, in Guilford County, conducted by the 
Quakers, now Guilford College. Ben and Mary en- 
joyed their studies, but the boarding school life did 
not appeal to Buck. Caring little for books, impatient 
under the slow routine of instruction, he felt that he 
was,not “getting anywhere.” Learning lessons was 
not 4 cult, keeping up with classes was easy, but he 


51 


JAMES B. DUKE 


could not “see the use of it.” Longing to get back to 
the farm and factory, where there was always some- 
thing doing and he was a factor in affairs, he left New 
Garden when the term was hardly half over. 

Presenting in after years an imposing building, a 
Memorial Hall, to Guilford College, which had grown 
to full collegiate rank, the Dukes looked back with 
pleasant recollections to the days spent in its groves 
and class-rooms. But Buck never would admit that a 
college education would have been of great advantage 
to him. 

“That is all right for preachers and lawyers,” he 
said, “but what use would an education be to me? My 
father wanted me to go to school, and I did go to this 
Quaker School near Greensboro for about three 
months. Elwood Cox [now a leading High Point 
banker] was there at the time. I went home and told 
my father that I wanted a share in the business. He 
didn’t give it to me then, but finally he did.” 

Education that fitted for commerce, however, was 
another matter. Eager to learn bookkeeping, how to 
estimate costs and profits, and carry on the varied de- 
tails of running a store or factory, he was determined 
to take a business course and finally his father consented 
for him to go to the Eastman Business College at 
Poughkeepsie, N. Y. 

Passing through New York, on his first trip North, 
he caught a glimpse of the metropolis. It appealed 
to his imagination. Here was a larger world, with 
boundless possibilities. His vision no longer bounded 
by the towns in the Carolinas, he was reaching out 
toward greater things. 

He absorbed everything available in business meth- 
ods and procedure at Eastman, studying day and night, 
and could hardly be induced to engage in play or 


52 


LOG BARN TO FACTORIES 


recreation. Caring nothing for the amusements that 
most boys crave, he regarded them as a waste of time, 
not half so interesting as getting on with his work. He 
was there, he said, for business, not pleasure. 

Passing the rest of his class, the young “Tar Heel” 
made a record, completing the course in less time than 
any other student who had been there. His instructors 
knew they had trained an exceptionally bright pupil, 
but must have been surprised a few years later when 
they saw the stripling from a Carolina farm becoming 
one of New York’s leading business men. Not for- 
getting his tutors or the days spent at Poughkeepsie, 
Mr. Duke, when he organized the American Tobacco 
Company, gave the man who signed his diploma a 
responsible position in the big concern, making a former 
teacher one of his auditors. 

Some men are born for business, and Duke was one 
of them. Asked, at the height of his career, the secret 
of his success, he said: 

“TI have succeeded in business not because I have 
more natural ability than those who have not suc- 
ceeded, but because I have applied myself harder and 
stuck to it longer. I know plenty of people who have 
failed to succeed in anything who have more brains 
than I had, but they lacked application and determina- 
tion. 

“T had confidence in myself. I said to myself, ‘If 
John D. Rockefeller can do what he is doing in oil, 
why should not I do it in tobacco?? I resolved from 
the time I was a mere boy to do a big business. I loved 
business better than anything else. I worked from 
early morning until late at night. I was sorry to have 
to leave off at night and glad when morning came so 
I could get at it again. Any young man can succeed 


53 


JAMES B. DUKE 


if he is willing to apply himself. Superior brains are 
not necessary.” 

When only fourteen he was taking a large part 
in the family’s affairs, and was made manager of the 
factory. But his ambition was to be one of the owners. 
A few years later, at eighteen years of age, his mind 
was made up. Failing to get a share in the family’s 
enterprise, he would strike out for himself. Having 
pondered the matter thoroughly, he put the case 
squarely up to his father. 

Mr. Duke was surprised when his youngest son came 
to him one day and said: 

“Father, I want you to emancipate me.” 

“What do you mean?” he inquired. 

“T want to go into business for myself.” 

“What do you intend to do?” his father asked. 
Buck told him. There was no further argument. 

“All right,” said Mr. Duke. “Go and write a check 
to yourself for a thousand dollars, so you will have 
some capital to start on.” 

Holding the check in his hand a moment, thinking, 
Mr. Duke then tore it up. 

“No, Buck,” he said. “Tl not sign this. Ive 
thought of a better way. I’ve decided to take you and 
Bennie into partnership with me.” 

There was no need of any formal partnership or 
articles of agreement. Buck was satisfied. It was more 
than he had hoped for. His father’s word was better 
than any bond or legal document drawn up by clever 
lawyers. Thus was born a firm which was to make 
some stir in the world—“W. Duke and Sons.” 


< 


54 


CHAPTER FOUR 
The Rise of “Golden Belt”? Tobacco 


ing into a manufacturing center. The coming 
of Johnston’s and Sherman’s armies, regarded at the” 
time as an unmitigated calamity, had proved to be the 
luckiest thing that ever happened for that section. 

Factories had been raided, some stores burned, farm- 
houses rifled and barns stripped, but the soldiers, 
Yankee and Confederate, had “taken a liking” to the 
local tobacco. Bearing away all they could carry, on 
arriving home they let neighbors sample it, and when 
supplies were exhausted, sent back for more. Among 
the thousands of troops camped thereabouts were men 
from almost every state. They spread the fame of 
Durham tobacco far and wide, blazing the way for a. 
big industry in the tiny hamlet. 

Ten years before the town had been only a depot, 
the railroad having reached there in 1854. Making it 
even a stopping-place was unintentional. The station 
was to have been located at Prattsburg, two miles west, 
where there was a store, cotton gin and blacksmith shop, 
as well as a tavern and grog-shop. But William Pratt, 
fearing the locomotives would frighten the farmers’ 
horses and drive away his customers, demanded an 
exorbitant price for the right of way. Dr. Bartlett 
Durham offered to donate four acres on his place, 
the railroad builders made a detour around Pratt’s land, 
located the station on the doctor’s property, and gave it 
his name, first Durhamville, later shortened to Dur- 
ham’s. 

Two stores were established, one by James W. 
Cheek, the other by M. A. Angier, father of Mrs. 
Benjamin N. Duke. Soon another store was erected 


55 


ae & meager in population, Durham was grow- 


JAMES B. DUKE 


near by as well as two barrooms and a carpenter shop, 
in which was the post-office. 

In 1858 Robert F. Morris and his son began manu- 
facturing tobacco, the town’s first industrial enterprise. 
There were a score or so of residences in the village 
before 1861, two churches, a log school house and an 
academy, as Dr. W. K. Boyd records in his history, 
“The Story of Durham”; but the war put a stop to 
construction there, as in most parts of the South, and 
in 1865 the place had fewer than a hundred inhabitants. 
But the one tobacco factory was still running, operated 
by John Ruffin Green, who had bought the interests 
of the former proprietors. 

War seems, somehow, to stimulate tremendously the 
use of tobacco. Nearly every soldier carried a pipe or 
plug in his knapsack, taking a puff or chew whenever 
there was opportunity. The weed was in great demand 
in the army. Soldiers going to the front, University 
students passing to and from Chapel Hill, stopped at 
Durham to fill their pouches, and Green did a flourish- 
ing business. 

Then calamity overtook him. Johnston’s Confed- 
erates as they retreated captured a plentiful supply of 
his tobacco. Sherman’s troops, who followed, raided 
the factory and swept it clean. 

Ruin stared Green in the face. But in a few months 
the ex-soldiers and others began to write back for 
“smokes.” Trade revived with a rush, and the plant 
had to be enlarged. The raiders had been his best 
advertisers. Other factories, like that of the Dukes’, 
sprang up in the town and on farms near by. Con- 
sumers began to demand “Durham” tobacco. Manu- 
facturers at other points, taking advantage of this 
popularity, began to label their products “Spanish 
Flavored,” Green’s variety, and “Durham” mixture. 

56 


“GOLDEN BELT” TOBACCO 


Seeking a distinctive brand which rivals could not 
use, Green finally adopted the Durham Bull. Inspired 
by two things, a massive bull owned by a neighbor, and 
the picture on Coleman’s mustard, manufactured in 
Durham, England, the sign of the bull, painted on 
sheet-iron and mounted in front of the factory, then 
widely advertised, became one of the best known of 
trade-marks. 

Under the management of William T. Blackwell, 
who became Green’s partner in 1867, and Julian S. 
Carr, who with James R. Day entered the firm after 
Green’s death, this became the largest smoking tobacco 
factory in existence. Blackwell had bought Green’s 
share from his estate for only $2,000. 

Extensive as were the Blackwell and other local en- 
terprises, another firm was coming into the field, which, 
small and modest at the start, was eventually to tower 
so far above them that finally the big Bull factory 
became merely a unit in their enterprises. 

Brodie Duke, not satisfied with the outlook on the 
farm, left his father and brothers in 1869, bought a 
small two-room building on Main Street, and began 
manufacturing on his own account. Grinding tobacco 
on the lower floor, keeping supplies in the upper story, 
he slept and lived in the factory, cooking his own meals 
for a while, later having a colored servant come in to 
cook for him, clean the rooms and keep the place tidy. 
“Semper Idem,” the title used originally for his 
product, was soon succeeded by another brand which 
was to become universally known—“Duke of Dur- 
ham.” 

Five years later Washington Duke and the other 
sons, James and Benjamin, moved to Durham. Join- 
ing forces with Brodie, they bought a lot on Main 
Street, and built a factory for their joint use. Three 


57 


JAMES B. DUKE 


stories high with a floorage of forty by seventy feet, 
this was a sizeable plant, fifteen “hands” being em- 
ployed. The building stood on part of the site where 
the Dukes later erected their huge plant, now occupied 
by the Liggett and Myers Company, which produces 
“Chesterfield” cigarettes by the million. 

Operating side by side, the two firms were separate 
concerns. A partition divided the building, Brodie oc- 
cupying one portion, his father and brothers the other. 
When more room was required another building was 
put up for Brodie. Manufacturing different brands, 
each having his own customers, they codperated closely, 
sold goods for each other, and made money. 

“Buck” Duke, though a mere stripling, took a lead- 
ing part in the enterprise. Attending the “breaks,” as 
the sales in the warehouses were known, buying the raw 
material for the factory, he was soon regarded as one 
of the best judges of leaf and shrewdest buyers in the 
town. That was saying a good deal, for Durham had 
become an important market, the leaf was sold at auc- 
tion and competition was fierce. To compete with the 
clever traders who gathered at these sales a buyer had 
to know his business thoroughly. But the youthful 
trader reveled in the daily battles of wit and trade, and 
held his own with the best of them. 

Talking with the farmers who brought their tobacco 
to market, he was eager to get their views, constantly 
asking what they thought of crops and prices and how 
they were “getting along.” 

Mornings he spent in buying tobacco, afternoons 
working with the hired hands in the factory, at night 
he planned means of attracting customers; thus learn- 
ing the details of buying, manufacturing, packing, 
shipping and advertising. Then he turned to sales- 
manship. 


58 


“GOLDEN BELT” TOBACCO 


Fond of “trading,’’ feeling sure of his ability to sell 
goods, he was determined to “have a try” at it. Sent 
out in 1875, his first trip was so successful that from 
that time forth, going on the road at every opportunity, 
he traveled throughout the South and West. Soon 
dealers in a dozen States knew and liked “young 
Duke,” as they called him, and he won a host of 
friends and customers. 

Before reaching voting age he was in general charge 
of the business, directing the buying and manufacturing 
as well as selling, though, “when I was away on the 
road,” he explained, “one of my brothers, father or 
somebody else looked after those things.” 

Though the firm was prospering and tobacco sales- 
men as a rule were known as liberal spenders, Duke 
practiced the most rigid personal economy. Calling on 
customers as long as the stores were open, he traveled 
at night on freight trains and by day in coaches to save 
the expense of a bed at a hotel or a berth in a sleeping 
car. Such large sales were made that more money was 
needed to buy raw material and manufacture goods. 
Unwilling to borrow, even with the prospect of larger 
profits, the problem was finally solved by selling a 
fractional part of the business to a partner at a price 
that put them in possession of the needed funds. 

This was brought about in 1878, when the firm of 
W. Duke, Sons and Company was formed. Gerald 
Watts, of Baltimore, impressed with the enterprise of 
the Dukes, sought the agency for their tobacco in 
Maryland. He was also seeking a business opening 
for his son, and convinced that the Duke concern of- 
fered an excellent opportunity, proposed an investment 
and partnership. Having kept the ownership up to 
that time strictly in the family, the Dukes were im- 
pressed with the possibilities of expansion. They were 


59 


JAMES B. DUKE 


making substantial profits, but were far from rich. 
Every dollar that could be raised was being put into 
the business, which was growing rapidly. With addi- 
tional capital, a great deal more could be accomplished. 

The Baltimore capitalist’s offer was accepted and a 
partnership formed with $70,000 capital, the firm con- 
sisting of the four Dukes and George W. Watts, each 
putting in an equal share. Though James had worked 
like a Trojan, saving every dollar, all he could raise 
was $3,000. But they had no idea of leaving him out 
of the company. He was too important a factor. 
His father loaned him $11,000 to make up his share, 
and he held an equal part with the others. Two years 
later Richard H. Wright, who manufactured the 
“Orange of Durham” brand, bought Washington 
Duke’s interest and was taken into the firm, 

Each of the partners was put in charge of some par- 
ticular part of the enterprise, James Duke taking charge 
of manufacture, running the factory; Benjamin con- 
ducting the correspondence and business of the office, 
Mr. Watts being the treasurer, Mr. Wright head of 
the sales department. Making a strong combination, 
they began to cut a wide swath. 

Tobacco is almost the oldest of American products, 
Columbus, discovering it in use among the natives, was 
amazed at the sight of men walking around with burn- 
ing firebrands in their mouths, blowing clouds of smoke 
from their lips. 

When Amadas and Barlowe sailed into the waters of 
what is now North Carolina, in 1584, they found the 
Indians smoking, using tobacco not only in ceremonials, 
puffing pipes of peace, but much as men do now, for 
the soothing effects and the indefinable pleasure it af- 
fords them. It was their patron, Sir Walter Raleigh, 
who introduced tobacco at Queen Elizabeth’s court 

60 


“GOLDEN BELT” TOBACCO 


and popularized its use in England. Tobacco is closely 
linked with the history of the earliest English settle- 
ments, with Raleigh’s first colonists who landed on 
Roanoke Island, but disheartened, were carried back to 
Great Britain by Sir Francis Drake; and their succes- 
sors, the “Lost Colony of Roanoke.” 

Following the permanent settlement at Jamestown 
tobacco culture became an important industry. In 1613 
the leaf was already being raised in commercial quan- 
tities in Virginia, and became the colony’s most valuable 
product. Adopted officially as the standard of value, 
notes issued against the leaf stored in warehouses were 
used as cash, and were for years the principal currency. 

Captain John Smith related that tobacco culture paid 
six times as much as the same labor expended in grow- 
ing wheat. The “gentlemen adventurers” naturally 
turned to raising tobacco, Acreage and yield increased 
enormously, with consequent overproduction. 

From 54 cents a pound in 1620, when 55,000 pounds 
were produced, the market went down to six cents in 
1639, when a “bumper” crop of 1,500,000 pounds was 
gathered. Suffering and hardship followed, discour- 
aging the colonists, who blamed almost everything but 
themselves for their condition, denouncing tobacco 
growing as a failure—and that was almost three cen- 
turies before a “trust” was thought of. 

Before the Revolution the prosperity of nearly half 
the Southern States depended on tobacco. By 1790, 
when Washington was President and the new republic 
was getting on its feet, the yearly crop had reached 
120,000,000 pounds. Lower in price than it had been 
during the hard times of 1639, the poorer grades bring- 
ing only three to four cents a pound, the crop was made 
profitable by culture on a large scale. 

Cotton is generally looked upon as the principal 

61 


JAMES B. DUKE 


source of the South’s wealth, and so it has been for 
more thana century. But cotton culture was extremely 
limited in colonial days. Enough was raised to supply 
the spinning wheels and hand-looms which made coarse 
cloths for dwellers on the plantations. But so long 
as the lint had to be picked off the seed by hand, the 
process, even with slave labor, was slow and costly. It 
was not until Eli Whitney invented the cotton gin and 
the power loom was devised that real manufacture 
began, and cotton cultivation became general. Up to 
the beginning of the Nineteenth Century tobacco, not 
cotton, was the principal “money crop” of the South, 
and had been so during the entire colonial period. 

In the half-century between 1790 and 1840 the in- 
dustry made slow progress. The French Revolution, 
the long Napoleonic wars and our own War of 1812, 
with subsequent embargoes and conflicts at sea, inter- 
rupted commerce. High import duties followed, tar- 
iffs and taxes were imposed, and there was small in- 
crease in tobacco exports for many years. 

Tobacco culture was general in North Carolina from 
its first settlement, but in the forties Virginia and Ken- 
tucky were still producing 60 per cent of the total crop. 
Virginia in 1849 raised nearly five times as much as 
North Carolina, producing 56,803,227 pounds to the 
latter’s 11,984,786. The principal markets and fac- 
tories being in Virginia, most of the Carolina product 
was sold there. Practically the entire crop was dark 
leaf, “sun cured,” of which other States produced a 
better grade. 

In 1852 came a discovery which brought about a 
radical change. Two farmers in Caswell County, 
N. C., not far from Durham, Eli and Elisha Slade, 
“curing” by chance some tobacco by fire, found that, 
instead of the dark brown color resulting from ex- 

62 


“GOLDEN BELT” TOBACCO 


posure to sun and air, the product was a bright yellow 
leaf. This resulted, it appeared, from curing by arti- 
ficial heat. Barns were built with sheet-iron covered 
firing flues beneath, and “flue curing” became a wide- 
spread practice. 

The flue-cured product bringing high prices, farmers 
strove to produce the new grade. But experience 
proved that by no means all tobacco would cure with 
this attractive color. It was confined in fact to almost 
a new type of the weed, grown only in sandy, siliceous 
soil. The region in which Caswell and Durham were 
located proving particularly adapted to its culture, pro- 
duction soon spread to the adjoining counties. 

Brighter in color than that produced elsewhere, the 
leaf was called “bright” tobacco, and the region in 
which it was produced the “Bright Tobacco Belt.” 
Later a more idealistic title was adopted, “The Go!lden 
Belt”—not inappropriate, for the yellow leaf brought 
a flood of gold to growers and manufacturers. 

’ Farmers began to shred and press this tobacco, for 
smoking and chewing. Loading wagons with the 
smokers, plugs and twists, they peddled the product 
through the country. First the crude work of manu- 
facture was done in barns, granaries or prize-houses, 
where tobacco had been prized into hogsheads in the 
days when the leaf was packed into these huge barrels, 
through which were run axles, and pulled by horses 
the cumbersome cylinders were “rolled” to Petersburg 
or Richmond. Small factories were built on the farms, 
and a considerable industry developed. It was in this 
way that the Dukes, like many others, began manufac- 
turing. | 

With the establishment of factories in the towns 
came a demand for more leaf than near-by farms could 
supply. | To induce growers further away to bring in 

63 


JAMES B. DUKE 


their crops, warehouses were built, at which the loads 
of leaf were sold at auction. Competition was keen 
between the rival buyers, bidding was brisk, good 
prices were paid, and Durham became the largest 
market south of Virginia. _ 

Even more potent was the energy with which its 
manufacturers prosecuted their efforts for trade. 
Seeking customers everywhere, they sold their goods 
throughout the United States, and exported to Europe. 
Distributing lithographed posters and window cards by 
thousands, painting signs on fences, barns and bill- 
boards, they spent large sums also for advertising in 
newspapers and magazines. Premiums and prizes 
ranging from mantel clocks to razors were offered to 
dealers and consumers. Sign painters were sent 
throughout America and finally to Europe and Asia, 
painting advertisements in every available spot. 

Vastly effective, this exploitation made Durham “the 
town renowned the world around.” Its tobaccos were 
sold in almost every land. James Russell Lowell in- 
troduced this favorite smoke to his friends in England. 
Thomas Carlyle used it. When Anne Thackeray 
called on Lord Tennyson, she found the poet laureate 
peacefully smoking “Bull Durham.” Blackwell and 
Carr had led the way, but it was the Dukes with their 
cigarettes who finally “taught the world to smoke 
Southern tobacco.” 


64 


CHAPTER FLVE 
Making Cigarettes by the Million 


or content with “playing second fiddle” to any 
| \ one, James Duke sought a field in which his 
firm would not be overshadowed. Hundreds of fac- 
tories were making smoking tobacco, one so firmly 
established that rivaling it seemed hopeless. 

“My company is up against a stone wall,” he re- 
marked. “It can’t compete with Bull Durham. Some- 
thing has to be done and that quick. I am going into 
the cigarette business.” 

The Dukes, however, did not plunge into the ven- 
ture without due consideration. Making a survey of 
trade conditions, the partners studied the matter from 
every standpoint, but finally “J. B.” was permitted to 
try out his plan. 

Cigarettes, almost unknown in this country before 
the Civil War, were just coming into general use. 
Russians and Turks had smoked them for generations. 
French and British soldiers acquired the habit when 
serving in the Crimea in 1856. After the Crimean 
War they carried home the paper-covered tubes, which 
became favorites in England, and from there the cus- 
tom spread to America. 

Introduced here in 1867, their manufacture was be- 
gun inasmall way. But in 1869 only 1,751,495 were 
made in the United States, not enough to keep a mod- 
ern factory busy half a day. By 1880 they had be- 
come an important part of the industry, revenue tax 
being paid on 408,708,366 that year, but the trade was 
yet in its infancy. 

“Bright” tobacco, raised in North Carolina, was 
found particularly adapted to cigarettes. But not until 
1881 was cigarette manufacture begun in Durham, both 

65 


JAMES B. DUKE 


the Dukes and the “Bull” factory concluding to go 
into it at about the same time. 

Local workers being unfamiliar with cigarette manu- 
facture, the labor had to be imported, the first rollers, 
both in England and America, coming from Russia, 
where cigarette making was a government monopoly, 
its secrets closely guarded. 

When the Dukes entered this field only a few firms 
in America, mainly in New York and Virginia, were 
making cigarettes on a large scale. Foremen and ex- 
pert workers had to be drawn from them. Two 
brothers, Jewish workmen from Russia, who learned 
their trade in Kovno and had worked in London and 
New York, were the first makers brought to Durham— 
J. M. Seigel, who took charge of this department for 
the Dukes, and David, employed in the “Bull” fac- 
tory. 

Making cigarettes by hand, as were all these early 
cigarettes, required hundreds of trained “rollers.” 
Even with the use of negro labor it was a costly process. 
Not long after the Duke firm began manufacture, how- 
ever, developments occurred which revolutionized the 
industry. 

Most important was the introduction of machinery. 
Inventors, realizing the demand, had been at work 
along this line for several years. James Bonsack, a 
young Virginian, finally succeeded in devising a ma- 
chine which fed in the tobacco and paper in continuous 
rolls, pasting, cutting the tubes into proper length, and 
performing the entire operation., An expert hand 
roller might make 2,000 or 2,500 cigarettes a day. 
Here was a mechanism that could turn them out at the 
rate of 100,000 daily. A wonderful invention, it was 
erratic, still to be perfected. 

Any one investing in the contrivances was taking a 

66 


CIGARETTES BY MILLIONS 


chance. Leased to manufacturers on royalty, the ma- 
chines had been placed in several plants, but failed to 
meet requirements. Mechanics and tobacco experts 
seriously doubted whether they could ever be made to 
work satisfactorily. There was, moreover, a distinct 
prejudice against machine-made cigarettes. 

Recognizing fully the hazards as well as the possi- 
bilities in mechanical production, the Dukes decided to 
make the experiment. Two of the Bonsack machines 
were ordered, and installed in their plant. Overseeing 
every detail of installation, Buck Duke regarded them 
as his “babies,” and no mother ever watched over her 
infants more carefully than he did over those initial 
machines. 

As the devices had made no marked progress else- 
where, and the Dukes were willing to install a consid- 
erable number if they proved successful, the inventor 
granted them a lower royalty than was being charged 
other companies, an advantage worth considering. But 
numerous difficulties were to be overcome. 

Marvelous pieces of mechanism, it was irritating and 
discouraging to find that minor imperfections were pre- 
venting the success of a device on which so much de- 
pended. 

As he watched the machines being installed, “J. B.,” 
impressed by one of the mechanics who seemed to him 
unusually bright and capable, turned to his brother 
Ben and said, “We must keep with us that young Irish- 
man.” The young Irishman, William T. O’Brien, 
proved to be a mechanical genius, and became one of 
their mainstays. 

Studying the machines from every angle, Mr. Duke 
asked countless questions and figured out how they 
could be improved. Working with O’Brien, often far 
into the night, defects, one by one, were remedied and 


67 


JAMES B. DUKE 


improvements made. At one time only a little rubber 
band, to which the tobacco stuck now and then, clog- 
ging the mechanism, stood in the way of success, but 
this required days to overcome. At last they had a 
machine which worked perfectly. The problem of 
quantity production was solved. 

The Dukes had no monopoly of the invention, how- 
ever. Allen and Ginter, of Richmond, had installed a 
few Bonsack machines, but feared their practicability, 
and did not until 1887 place them throughout the Rich- 
mond factory. The Kinney Tobacco Company also 
later used the Bonsack invention. Goodwin and Com- 
pany had a second device, the Emory, which they 
owned, and Kimball and Company had another, the 
Allison machine. But the Bonsacks proved the most 
successful, and the Dukes were first to use them in 
numbers. 

Cigarettes had been poorly packed. Some were sold 
in boxes, which were expensive; but for the most part 
they were put up in flimsy paper packs, easily crushed. 
A proper package was needed, attractive in appearance, 
protecting cigarettes from breakage or crushing, and so 
devised that they could be readily extracted by the 
smoker. There being nothing in existence meeting 
these requirements, Mr. Duke himself invented it. 
The result was the familiar sliding box, which later 
came into general use. 

Composed of two pieces of pasteboard, one, pasted 
together, constituting the cover; the other, folded, 
forming the inner portion, the sliding box, millions of 
them were used annually, and bore on the inside slip 
Duke’s name and signature. 

Machines were designed which would at a single 
blow stamp out the pasteboard shapes, and the Dukes 
installed their own printing and box-making machinery, 

68 


CIGARETTES BY MILLIONS 


and all the operations of cutting, printing and complet- 
ing the package were performed automatically in their 
plant. 
Marketing then became the problem. The Bonsack 
machines turned out cigarettes more rapidly than they 
could be sold, the first year there was a large over- 
production, and warehouses were piled with surplus 
stock. 

Use of the machines had reduced the cost of manu- 
facture from eighty cents to thirty cents a thousand. 
Turning out better made, better packed cigarettes at 
less cost than other manufacturers, the Dukes could 
produce them in unlimited quantities. The one thing 
necessary was to sell them. 

With a daring out of all proportion to their financial 
means or backing, they decided upon a selling campaign 
that would cover Europe and the Orient, as well as 
America. In charge of the campaign in this country, 
covering the principal cities as thoroughly as he had the 
local territory, James Duke began an intensive drive 
for new customers, eventually selling more cigarettes 
in three months than some competitors had disposed of 
in as many years. 

Sent abroad to introduce the firm’s products in other 
lands, Mr. Wright made a trip around the globe, trav- 
eling from one country to another for nineteen months, 
familiarizing dealers and wholesalers with the new 
brands and contracting for their sale. Going to Lon- 
don and Glasgow, he sold tobacconists in England, 
Scotland and Ireland. Antwerp, Brussels and Rotter- 
dam were visited; Paris, Berlin, Bremen and Ham- 
burg, establishing agencies in Germany, France, Bel- 
gium and Holland. Denmark, Norway and Sweden 
were invaded, stocking the dealers in Copenhagen, 
Christiania and Stockholm, and he made a trip to St. 

69 


JAMES B. DUKE 


Petersburg, entering Russia, the home of the cigarette. 

Penetrating into Africa and Asia, Australia and the 
isles of the sea, he visited Cape Town, Durban, Mau- 
ritius, Bombay, Delhi, Benares, Madras, Ceylon, Singa- 
pore and Java, returning by Sydney, Melbourne and 
New Zealand. After a year and a half abroad, Mr. 
Wright, succeeding far beyond expectations, returned 
to find that even more had been accomplished in this 
country. 

In connection with the sales drive the firm carried 
on an extensive advertising campaign that familiarized 
the public with their brands and made their largest 
competitors “sit up and take notice.” But advertising 
alone was not depended upon to market their products. 
They backed it up by salesmanship that extended from 
the factory door clear through to the consumer. 

Making a move that won thousands of customers at 
one stroke, Duke captured the lion’s share of the trade 
while his competitors were doubtfully considering what 
action to take. . 

Following the Civil War, the United States Govern- 
ment had imposed a heavy internal revenue tax on all 
kinds of tobacco. As the nation recovered from the 
ravages of war and governmental receipts from other 
sources increased, a point was reached where revenue 
taxes could be reduced. This reduction was being dis- 
cussed in Congress at the very time the Dukes had 
gone into machine production and were seeking some 
means of disposing of their surplus. 

Congress voted finally, in March, 1883, to reduce 
the tax on cigarettes. Smokers, of course, expected 
some reduction in the selling price, but not more than 
a cent or two on the package, if that. Cigarettes were 
then selling at ten cents, the universal price for the less 
expensive grades. Deciding that the moment had ar- 

70 


CIGARETTES BY MILLIONS 


rived to make a bold play for trade, Duke cut the price 
in half, to five cents a package. Not waiting until the 
new taxes went into effect, he announced that orders 
from jobbers would be filled immediately at the lower 
prices, if three-fourths of the goods ordered were to be 
delivered after the reduced tax was in force. 

The Duke cigarettes suddenly became the cheapest 
in the market. Orders poured in from every part of 
the country. No question now as to disposing of the 
surplus; that was quickly absorbed. The problem was 
to enlarge manufacturing facilities quickly enough to 
take care of the increased business. Competitors were 
distanced. With low manufacturing costs, better pack- 
ing, large advertising and lower prices, the Dukes were 
in the strongest possible position. 

The wooden factory in which they had operated for 
years being too small for their needs, work was begun 
on the large brick structure, known for a generation as 
the “Duke Factory,” which was completed in 1884, 
and enlarged from time to time, eventually reached a 
capacity of ten million cigarettes a day. 

What a close shave they had in getting started in 
cigarette manufacture, how near they came to failure 
and how that one stroke carried the undertaking 
through to success was revealed by Mr. Duke long 
afterwards. 

“We commenced in 1881 and did not do very much,” 
he said, “because the Government at that time was agi- 
tating the reduction of the tax from $1.75 a thousand 
to fifty cents. They did not get the bill through Con- 
gress until March, 1883, reducing the tax to fifty cents 
a thousand, which took effect the first of May. 

“During the agitation of the tax our brands, of 
course, were not in public favor. Dealers would not 
buy to any extent and take the chance of losing the 


a 


JAMES B, DUKE 


difference in tax, provided it should be reduced. So 
we had a pretty hard struggle those two years. We 
had accumulated quite some cigarettes on hand and 
were ready to close our factory and did close it. As 
soon as Congress passed the law reducing the tax to 
fifty cents, I saw then that there was a chance to sell 
ten cigarettes for five cents, and we immediately re- 
duced the price.” 

Making the reduction two months before the tax 
went into effect entailed considerable loss. But the 
move*gave a large immediate market for the surplus, 
started the factory going again, and put the business 
on a firm footing. In the next nine months they sold 
30,000,000 cigarettes, which was merely the start. 
Orders came in rapidly, larger buildings were erected, 
and in two years the $70,000 capitalization was in- 
creased to $250,000. 

This period also marked two important changes. 
James Duke in 1884 established his factory in New 
York, and Washington Duke, who had been out of the 
business for several years, in 1885 reéntered the firm, 
buying back the interest he had sold to Mr. Wright, 
who left Durham to go with the Lone Jack Cigarette 
Company in Lynchburg, Va. The Duke firm was in- 
corporated as a joint stock company, and father and 
sons were together again in business as they had been 
in the beginning. 


72 


CHAPTER SIX 
The Youngest Duke Invades New York 


EASURED by local standards, the Dukes were on 
M the high road to success. But this did not sat- 
isfy the junior member of the firm, who had a vision 
of national commerce and world trade. New York was 
the commercial center of the country. He determined 
to plant the Duke banner there. 

Older firms, with larger capital—Kinney Brothers, 
Goodwin and Company, W. S. Kimball and Company, 
Allen and Ginter—still dominated the cigarette indus- 
try. Close proximity to the long-established trade of 
the larger cities gave them a distinct advantage. Duke 
decided to fight these competitors on their own ground. 

Leaving his partners in charge of the home office, 
in the spring of 1884 he moved to New York. This 
seemed a hazardous venture. The firm was earning 
handsome profits, but most of its available funds were 
needed to run the Durham plant. 

Only twenty-seven years old when he launched his 
New York enterprise, Duke had less than $100,000 
capital at his command. To enter into competition with 
the large and wealthy firms that were his opponents 
was like a young David going up against commercial 
Goliaths. 

Beginning in the most modest way, setting up his 
establishment in a region of low rents on the crowded 
East Side, he first opened a small factory at No. 6 
Rivington Street, near the Bowery, enlarging his quar- 
ters as the output increased. Among the brands pro- 
duced were “Cameo,” “Cross Cut” and “Duke’s Best.” 

Days he spent in the factory, superintending every 
part of the manufacturing, from the leaf to the fin- 


73 


JAMES B. DUKE 


ished product. Nights were devoted to visiting to- 
bacco stores, meeting the dealers. 

“Getting acquainted” was quite as important here, 
setting up in a new location, as it had been in starting 
out to drum up trade in North Carolina. And he made 
friends in the tobacco shops of New York in very much 
the same way he had in the country stores and towns 
down South. Talking with proprietors and clerks, he 
not only won new customers, but learned what appealed 
most to dealers and consumers, what would and would 
not sell. Probably no one in the industry knew so 
many dealers personally, or was more familiar with 
all the ins and outs of the trade. Wooden Indians 
were then the standard signs, standing in front of 
nearly every tobacco shop. Mr. Duke, his friends re- 
marked, knew more of these Indians and their owners 
than any other man in New York. 

Putting into the business every dollar at his com- 
mand, he sought the cheapest decent living quarters 
that could be found, taking a room in Harlem. That 
proved too far away; too much time was lost in get- 
ting to and from work. So he rented a room nearer 
the factory, taking his meals at restaurants on the 
Bowery. 

Keeping down personal expenses and the cost of 
manufacture to the lowest practicable point, Duke was 
lavish in expenditures for advertising and exploiting 
his goods. By intensive sales methods he gained, 
within a few months, a foothold in the city, his brands 
being placed in hundreds of stores where larger com- 
petitors, with infinitely more capital and prestige, had 
been supreme. Within a year he was winning his way 
steadily in New York and the Northern markets. 
Smokers liked his cigarettes, which were selling rap- 
idly, and the little factory was kept busy. By the end 


74 


<3} 
& 
< 
ts 
to} 
<q 
os 
a 


THE RISING YOUNG TOBACCO 








mars 
hha INVADES NEW YORK 


of the second year the New York branch began to pay. 
But this necessitated drawing heavily on the home 
office for funds. His wealthy competitors could com- 
mand almost unlimited amounts, but Duke, with his 
slender capital and small plant, had no such standing 
with the banks—a handicap that must be overcome. 
Going to a bank president, met in the course of busi- 
ness, he told of his broad plans and narrow means. 
Surprised at the young manufacturer’s ambitions, but 
more impressed with his simple integrity and truthful- 
ness, the banker agreed to extend the needed credit. 
Duke, however, considered this a reserve to be used 
_ only in case of necessity, and carried through this cam- 
paign successfully without borrowing the money he 
might have had. But he almost “scraped the bottom 
of the barrel,” as Southerners say, moving from a room 
costing three dollars to one that could be rented for 
two dollars a week. 

Having turned the corner financially in cigarette 
manufacture, and seeing a big future for a combination 
smoking and chewing tobacco sold at a low price, he 
put on the market “Honest Long Cut,” which, quickly 
introduced in the principal cities, had a considerable 


Widespread advertising was needed to “put over” 
this novelty, however, involving large sums of money 
much of which had to be borrowed. D. C. Patterson, 
now president of the Imperial Tobacco Company of 
Canada (Limited), who labored in close association 
with Mr. Duke during that period, relates how he built 
up his credit, to be used in case of emergency. 

“About this time, while maintaining a fair bank bal- 
ance,” Mr. Patterson recalls, “Mr. Duke began to ne- 

_ gotiate with the financial house of Goldman, Sachs & 
_ Co,, for small loans of $10,000 or so, at thirty to sixty 


75 





JAMES B. DUKE Ee 
days. These notes were always paid a day in advance, 


I don’t think one of them ever came due without Mr. 


Duke making inquiry and cautioning me not to over- 
look payment. It was not long before representatives 
from Goldman, Sachs & Co. and Ward & Co. called 
on us regularly, soliciting W. Duke Sons & Company’s 
paper, and we kept discounting notes and piling up 
funds in the bank. 

“I asked Mr. Duke why he was borrowing at six 
per cent when he had a big balance in the bank draw- 
ing no interest. He smiled and said: ‘It’s all right; 
you will know some day.? Of course I did know later 
what, at that time, I was unable to comprehend, that 
his purpose was to establish a credit for the firm’s paper 
on the money market.” 

The wisdom of this foresight was soon disclosed. 
Sales of the new brand had become “spotty.” Total 
volume had decreased, but there was sufficient demand 
to indicate that it had merit. Then Duke marshaled 
his resources, consisting principally of absolute faith in 
himself and an established credit, and launched a hpge 
publicity campaign. 

G. Houghtaling & Co., at that time the largest sign 
painters and bill posters in the United States, ry 
the country from Maine to California, north of |the 
Mason and Dixon Line, with bill posters and s 
boards advertising “Honest Long Cut.” Under |the 
stimulus of this and other forms of advertising, cost-— 
ing more than $750,000 annually, that brand alone — 
reached a sale of over 500,000 pounds a month, | 

Next, Duke began to popularize his cigarettes by 
putting photographs of stage celebrities in each pack- 
age. Then coupons were placed in the packages, en- 
titling the holder, for a given number, to a crayon pic- 
ture of some historical notable. The list ranged from 

76 | 


INVADES NEW YORK 


Christopher Columbus to George Washington, appeal- 
ing to all nationalities. Later pictures of baseball play- 
ers, sovereigns and rulers, flags of all nations were’ 
placed in cigarette packs. Boys began to make collec- 
tions of “cigarette pictures,” to trade and preserve 
them, and the craze extended to every town and vil- 
lage. 

Duke became one of the country’s largest adver- 
tisers, setting the pace for big business in other lines 
as well as his own. In the use of large space in news- 
papers, magazines, theatre programs, on bill-boards 
and everywhere signs and arguments catch the public 
eye, he was a pioneer, backing his faith with his money. 

At times his partners were alarmed by the vast sums 
poured out for publicity. But he demonstrated that 
national advertising on a large scale not only could be 
made to pay, but was one of the best investments for 
any firm that had something to sell that the public 
wanted. He created what experts now call “consumer 
demand.” Smokers and chewers walked into stores by 
thousands, calling for his brands by name. Familiar 
with them, they would take nothing else. 

From this extensive exploitation the firm reaped rich 
returns. Factories and plants had to be enlarged con- 
tinually, to keep pace with sales. In a few years the 
Dukes occupied a commanding position in the North 
and West as they had in the South, and held a large 
part of the national trade. 

Expenditures, however, had run into millions of dol- 
lars, at times approaching if not exceeding the entire 
amount invested in bricks, mortar and machinery. 
But it was this enterprise that made their products 
known in every city and hamlet, making their brands 
and good-will more valuable than their factories. 

During these six years, pouring out money in ex- 


77 


JAMES B. DUKE 


tending his business, Mr. Duke was spending less on 
himself, working harder and devoting more attention 
to details than was many a clerk drawing weekly wages. 

His mode of living was simplicity itself. He had a 
modest room on Gramercy Park at $10 a week just 
before the consummation of negotiations which gave 
the Duke concern $7,500,000 interest in the newly- 
formed American Tobacco Company. That was more 
than he had previously paid for such accommodation. 
Not mean or “close” in any sense of the word, economy 
was a cardinal principle with him, one which he con- 
tinually preached to employees, telling them that what- 
ever salary a man received he should save half of it. 
“Walk while you are young so that you can ride when 
you are old,” was one of his mottoes. 

Making a practice of being at his office in time to see 
the factory hands arrive in the morning, he made re- 
peated excursions through the work-rooms, examining 
the stock on the work benches. Employees believed he 
had the uncanny faculty of picking the only faulty 
package out of a lot containing thousands otherwise 
perfect. Sending for a carton of goods already packed, 
he would open it on his desk and examine each pack- 
age. If a stamp or label pasted on crooked was dis- 
covered, the superintendent was sent for. Needless to 
say, the whole working force was kept on its toes. 

He personally selected his advertising matter, and 
when show-cards, calendars or posters were submitted 
the office staff would be called in and each one asked 
which he or she preferred and why. Keeping an ear 
close to the ground in estimating popular taste, he 
catered to the wants of the masses rather than the se- 
lect few. 

His hobby in the office was a book in which was re- 
corded, independently of the sales ledger, “Sales by 


78 


INVADES NEW YORK 


Brands by Towns.” Poring over this for hours he 
would study the increase or decrease in sales in vari- 
ous sections of the country, and in case of a decrease 
would send an inquiry at once to the salesman in that 
territory, and strengthen the weak spots by increased 
effort and advertising. 

A watchful eye was kept on credits, especially the 
weak accounts, and he had many, his chief accountant 
recalls, for he based credit largely on character and 
enterprise. An energetic peddler whose trade reached 
into nooks and corners overlooked by the jobber was 
considered a more important distributor than the big 
jobber with a Bradstreet’s rating. If there was an oc- 
casional loss, which seldom occurred, it was good ad- 
vertising. Goods well advertised were sure to reach 
the larger buyers through one jobber or another, he 
pointed out, but the peddler does introductory work, 
placing the products most easily procurable in advance 
of the introduction by the regular jobber of opposition 
brands. 

No detail escaped his scrutiny and constructive criti- 
cism. Certificates for dealers packed in each 500- 
package carton, having a cash value of fifty cents 
each, had to be signed as a safeguard against fraud. 
Five girls were assigned the task, and after a week four 
of them averaged some three thousand signatures each 
per day. The fifth, Maggie McConichie, did scarcely 
more than half that number. Too long a name to 
write, Mr. Duke decided. “One name is as good as 
another,” he told her; “change your signature to A. B. 
Cox.” henceforth “Miss Cox” doubled her capacity, 
thereby saving half her wages and having the satisfac- 
tion of excelling in her work. 

Keeping in touch with the trade was a cardinal point. 
Even after the business ran into millions, Duke spent 


79 


JAMES B. DUKE 


many of his evenings in visiting retail tobacco shops. 
Making some purchase, he would sit on a shipping case, 
if no chair was available, listening to customers’ com- 
ments, asking questions between sales until the store- 
keepers not infrequently were provoked. ‘Then he 
would ask the dealer if he would not like some show- 
cards to decorate his store. These would be sent up 
next day, and the merchant was almost invariably flat- 
tered by discovering that he had talked with Duke, 
“the tobacco man,” and was thereafter free with in- 
formation. 

Another method he had of gauging the relative de- 
mand for different brands was by counting the empty 
cigarette packages on the streets. This habit of watch- 
ing the sidewalks as he walked along disclosed at least 
one superstition of his. He picked up every pin that 
pointed toward him, and the under lapel of his coat was 
sometimes padded with “lucky” pins. 

Not believing in vacations, the proprietor took none 
himself in that busy period and held that no one really 
interested in his occupation should need a vacation; 
that the pleasure he got out of his work was all the 
recreation needed. 

After the formation of the American Tobacco Com- 
pany, when the talent represented by the five compa- 
nies was recruited into the service of the one corpora- 
tion, he did not relax, as he might have done, but be- 
came engrossed in the task of coérdinating the several 
units. 

Devotion of his wealth to the good of others was in 
his thoughts even at that early period. Asked what 
he intended doing with his money, for he was a bache- 
lor and already had more than one man could possibly 
need, he replied: 

“T am going to give a good part of what I make to 

80 


INVADES NEW YORK 


the Lord, but I can make better interest for Him by 
keeping it while I live.” 

“This was not said in any spirit of irreverence,” Mr. 
Patterson states, “but was in accord with his wise judg- 
ment in conserving rather than dissipating the resources 
necessary for the accomplishment of greater aims, which 
he then had in mind, and which have since been real- 
ized in a practical way for the increasing benefit of fu- 
ture generations. 

“In this connection, I have often heard Mr. Duke 
say that he would do something for the ‘poor old nig- 
ger,’ for whom, as a race, he seemed to have a great 
sympathy. Behind all this ambition and tireless energy 
was a fixed purpose, and who can doubt that through 
that purpose the guiding hand of Providence was work- 
ing to this noble end.” 

Having a rugged constitution, never tiring of work, 
his deep interest in it seemed to have a regenerating 
effect. His retentive memory was sometimes discon- 
certing to those who did not recall details which he 
remembered vividly, to the last date and figure. 
Thoughtful, believing every man should think for him- 
self, he frequently remarked that he did his best think- 
ing after going to bed. He loved to have his little 
joke with associates whose only reason for their politics 
was the section of their birth. 

«Why are you a Democrat?’ he would ask,” one of 
them recalls. “The best answer I could give was that 
I was born that way. Laughing heartily, he would 
say: ‘You are a Democrat because your father was. 
That’s no reason at all; you ought to think for your- 
seit? 7? 

Having a strong family attachment, being particu- 
larly devoted to his father and brother, he had few 
social friends outside of business and never encouraged 

81 


JAMES B. DUKE 


his employees to make such acquaintances, believing it 
a waste of time and a distraction that hindered one’s 
success. 

Dignified and serious in manner, cordial and friendly 
toward employees, high and low, he was intensely in- 
terested in their welfare, and they valued nothing so 
much as his approval. Without urging or pushing 
workmen or aids, laboring harder than they did, and 
always ‘on the job,” the example of his own industry 
and their confidence in his judgment and sincerity drew 
from them the best they had to give, and this was given 
in a spirit that wages or salary alone could not com- 
pensate. 

“Ts it fair?” was his yardstick in dealings with others, 
workmen as well as business men. One evidence of 
this was the fact that during his régime there was not 
a strike in the Duke factories, and few labor troubles 
occurred in any of his large establishments. 

Going straight to the point when he had anything to 
say, his decisions were based on deliberate, logical rea- 
soning. Never a reader, he was at the same time an 
earnest student, but his study was men and affairs, not 
books. A keen observer, quick to remedy mistakes, he 
was not slow to profit by experience and observation. 

“By industry, thrift and self-denial while maintain- 
ing the highest standard of business ethics, he built his 
own character, shaped his own ideals,” says one who 
was at his side during the years of struggle in New 
York, “and out of this process came the man of vision, 
who overcoming all obstacles, succeeded in reaching the 
top, was acknowledged leader of his peers and has, to 
his everlasting credit, left a legacy to others in charac- 
ter building that is not second in importance to his 
wonderful gifts to charity.” 

His promptness in selecting assistants was thoroughly 

82 


INVADES NEW YORK 


characteristic. ‘On one of his visits to Durham, in the 
spring of 1885,” Mr. Patterson relates, “Mr. Duke 
sent for me and offered me a position in his New York 
office. In answer to his question, I told him I would 
like to go to New York. He told me what my salary 
would be at the start, and said: 

“After that everything will depend upon yourself. 
I have only one instruction to give you—don’t ask me 
to raise your salary. I always know what my people 
are worth to me, and I pay them what they are worth 
without being asked.” 

Leaving on time, at three days’ notice, Mr. Patter- 
son, like many others whom Mr. Duke took into his 
employ, was put in the way that led to steady pro- 
motion, with continually increasing pay, and remaining 
with the Dukes and allied interests, won a high position 
in the tobacco trade. 

Generous to those who rendered loyal service, Mr. 
Duke gave credit for everything of value accomplished, 
as well as financial rewards. Eager to have others pros- 
per with him, this feeling extended to dealers, agents 
and customers, as well as stockholders and émployees. 

When the gift of millions to education and philan- 
thropy was announced and praise of his generosity filled 
the newspapers early in 1925, a former employee in his 
first New York factory, signing himself modestly “One 

of the Hands,” wrote from Brooklyn this letter to the 
New York Evening Post: 


“When I read your account of James B. (Buck) Duke’s 
phenomenal rise from poverty to riches, I thought that a few 
words appended to that tale would not go amiss, 

“When James B. Duke opened a cigarette factory at No. 
6 Rivington Street near the Bowery, thirty-five or thirty-six 
years ago, I was one of the many to be employed by him. 
He, a few years later, moved to a larger factory at 28th 


83 


JAMES B. DUKE 


Street and First Avenue, where, within a short time, he had 
four machines installed and had men from the South to 
operate them. ‘The output increased to such an extent that 
he sought and obtained larger quarters at 39th Street and First 
Avenue, where he installed eighteen or twenty more machines 
and where he remained up to the merging of the Kinney 
Tobacco Company and Duke Tobacco Company into the 
American Tobacco. 

“During all these years, I, as well as the rest of his em- 
ployees, found ‘Buck’ Duke (as we always termed him) one 
of the most kindly, affable men we have ever met. Con- 
siderate in all ways, his employees’ interests were his, and his 
kindly word and genial smile were the factors which kept 
the Rivington Street hands with him until years later when a 
fire wiped out the plant at 39th Street and First Avenue.” 


Six years after landing in New York the Carolinian 
had become the largest factor in the cigarette industry. 
In 1890, just before the formation of the tobacco com- 
bine, a book of sketches of leading firms stated: 


“The Dukes have enlarged their facilities from time to 
time until at the present writing they have the largest ciga- 
rette and smoking tobacco establishment in the world, and are 
doing a business that amounts to about $4,500,000 per annum. 
In addition to their mammoth tobacco works at Durham, they 
have a branch factory in New York, in which they employ 
over five hundred hands. ‘They have also in Durham, ware 


and prize houses which combined would cover five acres of 
land.” 


Internal revenue taxes, the barometer of tobacco 
manufacture, indicated strikingly their progress. From 
$90,000 in 1883 these taxes paid by the Dukes in- 
’ creased by 1888 to $517,783, and in 1889, just before 
the American Tobacco Company was organized, reached 
a round $600,000. ‘Their output had increased to 
940,000,000 cigarettes annually, nearly half of the 
country’s total production. 


84 


CHAPTER SEVEN 


Founding the American Tobacco Company 


ucCcEss was won only after a long and desperate 

fight. Finding that the young Southerner was 
cutting deeply into their trade, distancing them in their 
own territory, the “Big Four” retaliated. A “tobacco 
war” ensued that was memorable. 

Money was poured out like water, not only in adver- 
tising but in giving premiums to consumers, paying 
bonuses to dealers and in various other ways. Every 
scheme that could be devised or influence exercised was 
brought to bear. Five firms—Allen and Ginter, W. S. 
Kimball and Co., Goodwin and Company, the Kinney 
Brothers and the Dukes—were the chief contestants, 
but there were many smaller concerns reaching out for 
a share of the trade. 

“The manufacturers divided their energies,’ as the 
New York Herald Tribune expressed it, “between 
pushing their own businesses and cutting each other’s 
throats. Never was there keener, more bitter or more 
incessant trade rivalry. In one year the Duke firm 
spent $800,000 in advertising and made net profits of 
less than half that sum.” 

Such large amounts were expended that few made 
any profit at all, and some lost heavily. Out to defeat 
the audacious invader at any cost, older manufacturers 
were smashing away vigorously, almost blindly—too 
exasperated to quit, but wondering when the contest 
would ever end. Though the attacks were centered on 
him, Duke, working day and night, directing his forces, 
devising new moves and checkmating those of op- 
ponents, thrived on opposition. 

But, detesting waste in any form, incessant warfare 
seemed foolish to him, “bad business.” Why should 

85 


JAMES B. DUKE 


manufacturers spend time and money fighting each 
other? Why couldn’t they get together, operate in 
harmony and make larger profits? That this was the 
logical way out Duke sensed long before, but the time 
was not ripe for it. Declining to admit defeat, op- 
ponents refused to give in, and the “war” went on. 

As late as 1887, when some of the largest manufac- 
turers were preparing for their annual dinner, one of 
them asked in jest if Duke should be bidden to the 
feast. 

“We don’t consider him a manufacturer of ciga- 
rettes; he will be broke before the year is out,” was the 
reply. 

Hearing of the incident Duke laconically replied, “I 
don’t talk, I work.” 

In a year’s time they had offered to buy him out. 
But his answer, as an associate expressed it, was like 
that of the Helvetians to Cxsar, ““We are accustomed 
to ask, not to give, hostages.” 

In another year these manufacturers had agreed to 
sell their businesses, plants and trade-marks to a com- 
pany formed on lines laid down by Duke, on terms 
proposed by him, and of which company he was to be 
the president. Receiving more than was paid to any 
other manufacturer save one, he was paid exactly as 
much as that one was allotted. 

With their power, capital and prestige, the older 
firms had been unable to oust the newcomer. Study- 
ing the demands of dealers and customers closely, op- 
erating his factory economically, he was still earning a 
profit when they were losing heavily. But the contest 
~ could not continue indefinitely. It was too costly to all 
concerned, 

Combination being the sensible solution, how to bring 
it about was the question. Through an advertising 

86 


AMERICAN TOBACCO CO. 


agency which served the various interests, Duke learned 
of the concern he was giving his competitors. Redou- 
bling his efforts, he increased advertising, pushed sales 
and forced the fighting. 

Soon this brought results. Overtures came from one 
of his leading rivals, the Kinney Tobacco Company, 
and through an intermediary negotiations were begun 
in 1889. Shortly afterward the other companies were 
brought into the conference. 

Consolidation, however, was no easy matter—bring- 
ing together vigorous competitors, reconciling conflict- 
ing claims and interests, apportioning stock and deter- 
mining the amounts each was to receive. 

Behind the scenes some hard battles were fought. 
Most difficult to convince was the firm of Allen and 
Ginter, of Richmond, long the largest factor in the 
cigarette business and the Dukes’ strongest rival. 

Taking up the matter with Lewis Ginter, head of the 
Virginia concern, Mr. Duke explained the plans and 
suggested his entering the merger. Here was upstart 
young Durham talking to rich and well-established old 
Richmond. Mr. Ginter heard him through, and 
smiled. 

“Listen, Duke,” Ginter said, “you couldn’t buy us 
out to save your neck. You haven’t enough money and 
you couldn’t borrow enough. It’s a hopeless propo- 
sition.” 

“I make $400,000 out of my business every year,” 
Duke answered. “I?ll spend every cent of it on adver- 
tising my goods as long as it is necessary. But Vl 
bring you into line.” 

Nearly a year longer the contest continued, but Gin- 
ter was at last won over, and the combine was com- 
pleted. 

It was in the “tobacco war” that Mr. Duke first in- 

87 


JAMES B. DUKE 


troduced the coupon system, now so widely used by the 
chain tobacco stores. Sending out armies of sign- 
painters, the names of his products were blazoned on 
walls, barns and billboards, and newspapers and maga- 
zines were enlisted in the greatest burst of advertising 
known in the industry. 

Against this, Allen and Ginter, as the New York Sun 
described it, “stuck to tradition, putting in each pack- 
age of cigarettes a bright picture of a lady in tights. 
It was a spectacular fight—a battle of tights and paint 
brushes—but Duke won in the end. Nobody else had 
then the courage to give battle and the trust was 
formed.” 

The story has been told that, when the representa- 
tives met to form the merger they agreed to lay their 
cards on the table, present the complete figures of their 
business, and the firm which had lost least would be 
chosen head of the consolidation. "When the figures 
were exhibited, only one showed no loss at all, but a 
substantial profit. That was Duke and, consequently, 
he was elected president. 

As a matter of fact, that story was apocryphal. 
There was no such casual agreement, but the result was 
much the same as if there had been. Investigation of 
the various firms’ affairs demonstrated that, in sales, 
economical production and marketing, the Dukes were 
in the lead. James Duke had originated the combina- 
tion. He was recognized as the ablest, most energetic 
and successful of them all, and was unanimously elected 
president. 

As a compliment to Major Ginter, regarded as the 
dean of the manufacturers, the corporation was orig- 
inally organized in Richmond, being granted a charter 
by the Legislature, but that action was violently at- 

88 


AMERICAN TOBACCO CO. 


tacked as legislation encouraging a trust, and the appli- 
cation for a Virginia charter was withdrawn. 

As this was the beginning of the various combina- 
tions which revolutionized manufacture and marked 
the rise of Mr. Duke to a commanding position in the 
industry, it is worth some study in detail. 

Organized under the laws of New Jersey, then more 
liberal to corporations than those of other States, the 
American Tobacco Company was chartered on January 
31, 1890. Five concerns were in the consolidation, the 
company acquiring the entire plants, good-will and 
business of Allen and Ginter, Richmond; W. Duke, 
Sons and Co., New York and Durham; the Kinney 
Tobacco Co., New York and Virginia; W. S. Kimball 
and Co., Rochester, N. Y. and Oxford, N. C., and 
Goodwin and Co., New York. 

The capital stock was $25,000,000, consisting of au- 
thorized issues of $10,000,000 eight per cent non- 
cumulative preferred, and $15,000,000 common stock. 
Par value of the preferred shares was $100, and of the 
common $50. Of this the Dukes received $7,500,000, 
Allen and Ginter the same amount, the Kinney Com- 
pany $5,000,000 and the other two firms $2,500,000 
each, 

Lewis Ginter and John Pope, of Richmond; George 
Arents and James B. Duke, of New York; Benjamin 
N. Duke and George W. Watts, of Durham, N. C.; 
Francis S. Kinney, of Butler, N. J.; William H. But- 
ler and Charles G. Emery, of Brooklyn, N. Y.; and 
William S. Kimball, of Rochester, N. Y., were the di- 
rectors, the officers being: James B. Duke, President; 
John Pope, First Vice President; William S. Kimball, 
Second Vice President; William H. Butler, Secretary; 
Charles G. Emery, Treasurer, and Stephen Little, 
Comptroller. 


89 


JAMES B. DUKE 


When in September, 1890, the preferred shares were 
listed on the New York Stock Exchange, the applica- 
tion, signed by the Farmers’ Loan and Trust Co., W. 
D. Searls, vice-president, stated: 


“The company is organized for the purpose of curing leaf 
tobacco, to buy, manufacture and sell tobacco in all its forms, 
and to establish factories, agencies and depots for the sale and 
distribution thereof, and to do all things incidental to the 
business of trading and manufacturing aforesaid, etc., with 
power to carry on its business in all the other States and Ter- 
ritories of the United States, and in Canada, Great Britain 
and all other foreign countries.” 


The corporation, it was announced, “has purchased 
and is the owner of all real estate, cigarette and tobacco 
factories, storage warehouses, leaf-curing houses, ma- 
chinery, fixtures, patents, trade-marks, brands, good 
will, etc.,” of the five firms included; the assets con- 
sisting of real estate, factories, patents, brands, good 
will, etc., $22,365,353; leaf tobacco and raw material, 
$2,634,647; total, $25,000,000, and cash and cash as- 
sets of $1,825,000. 

There were no mortgages, liens or liabilities except 
the ordinary current liabilities incurred in carrying on 
its business, which did not exceed $100,000. The en- 
tire issue of common stock, $15,000,000, and $5,- 
000,000, half of the total issue of preferred stock, were 
deposited with the Farmers’ Loan and Trust Co., to 
be held in trust for the owners until September, 1891. 

Giving his own account of how the American To- 
bacco Company was formed, Mr. Duke said one of the 
principal reasons was to “get an organization.” 

“My father was a very old man and had practically 
retired from business,” he said. “Mr. Watts and my 


sole) 


AMERICAN TOBACCO CO. 


brother, B. N. Duke, were in bad health, my brother 
Brodie L. Duke had nothing at all to do with the busi- 
ness; so that practically left the management in my. 
hands. I had not had the time really to build up an 
organization to help me, except to do the clerical work 
or what I directed to be done. 

“T thought in selling our business to the American 
Tobacco Company in connection with other manufac- 
turers we would get a good organization of people 
who would be of assistance in conducting the business, 
and then besides I expected to make a profit out of it, 
because you can handle to better advantage a large 
business than a small one.” 

Buying leaf tobacco cheaper was not in his mind, 
Mr. Duke said. In fact he believed the prices the 
farmers received averaged more than before, as the 
company bought direct at the warehouse auctions, elimi- 
nating the speculators who had been buying and selling 
to manufacturers. Cutting out the speculators’ profits, 
he thought, meant more money for the farmer. 

One of the greatest economies was in cutting down 
advertising and selling costs. The Dukes’ advertising 
expenses, he pointed out, were about twenty per cent 
of their sales. ‘In other words,” he explained, “we 
spent about $800,000 in 1899 and did a business of 
between $4,000,000 and $4,500,000.” Other compa- 
nies were spending similar amounts. 

Prices of cigarettes to consumers remained the same, 
five cents a pack. Rates to dealers, which had varied, 
were in some instances reduced, the manufacturers’ 
price being fixed at $3.80 a thousand, with a rebate of 
30 cents to the jobber. 

Cigarettes made of Southern “bright” tobacco con- 
stituted ninety per cent of the output. Too narrow a 
dependence, Duke thought. Public taste was fickle; if 


9g! 


JAMES B. DUKE 


it changed they might be left in the lurch. Selling one 
specialty was uneconomical. His company ought to be 
able to carry a full line to supply all classes of con- 
sumers. 

That was his object, Mr. Duke said, in buying vari- 
ous factories later. ‘We wished to manufacture a full 
variety to make every style of tobacco the public 
wanted.” 

Pursuing this policy, other plants were acquired from 
time to time. In April, 1891, the factories of Marburg 
Brothers and Gail and Ax of Baltimore, were brought 
into the combine. Three months later the stockholders 
voted to increase the common stock issue from $15,- 
000,000 to $21,000,000 and the preferred from 
$10,000,000 to $14,000,000, making the total author- 
ized capitalization $35,000,000. 

From its inception the company earned substantial 
profits. After paying eight per cent on the preferred 
and twelve per cent on the common stock in 1891, there 
was a surplus of $1,291,995, which two years later was 
increased to $5,333,062. The net earnings in 1894 
were $5,069,416, and the total surplus, $7,198,290. 

For some years no additional plants were purchased, 
but going successfully through the panic of 1893 and 
the succeeding period of depression, when so many 
firms succumbed, the company demonstrated its earning 
capacity and the soundness of its structure. A large 
surplus had been accumulated, and the corporation was 
in a strong financial as well as commercial position. 
Mr. Duke’s confidence in his plan had been abundantly 
justified. 

Competition, however, was still active. Far from 
shaving a monopoly, the combine had to fight for busi- 
ness in not a few lines and sections. 

Attacked from the time of its organization as a ~ 


92 


AMERICAN TOBACCO CO. 


“trust,” the American Tobacco Co. differed, in many 
respects, from others so designated. Henry O. Have- 
meyer’s dictum, “The protective tariff is the mother of. 
trusts,” did not apply to the tobacco combine, which in 
no sense depended on the tariff and, in fact, derived 
very little benefit from it. Neither did it depend on 
discriminative railroad rates as had the Standard Oil 
Company in its early days, or on exclusive contracts. 
In fact, in characteristics and methods, it differed widely 
from many other combines. 

Though exercising a potent influence, the company 
could not control the prices of either the raw product 
or the manufactured article. Any one with sufficient 
capital was free to set up cigarette or smoking tobacco 
machinery and begin manufacturing tobacco. Ciga- 
rettes were the only products in which the corporation 
was supreme, and there were many independent manu- 
facturers in that field. 

Economy and efficiency in manufacture and market- 
ing; the possession of well established brands which 
had been made popular through extensive advertising; 
ageressive business methods and superlative salesman- 
ship were mainly responsible for the company’s prog- 
ress. 

Mr. Duke himself never did consider that mere 
combination was the basis of its success. He had 
brought the leading firms together to end costly and 
foolish rivalry and reduce the cost of doing business. 
That seemed to be, and probably was, the best thing 
to be done at the time. But when, twenty-one years 
later, the combine was ordered dissolved, and many 
stockholders feared ruin and destruction of their inter- 
ests, of all those concerned the least disturbed was the 
man who had formed the consolidation and directed it. 
He had no fears for the future. The company he had 


93 


JAMES B. DUKE 


built up did not depend for its existence on any ar- 
rangement, however strong. His business could get 
along, combined or alone. Years afterward he re- 
marked: 

“T don’t know that the combine was really of much 
advantage to us after all. We were doing well as we 
were; we were beating the other fellows in manufac- 
turing and selling anyway. I believe we would, in 
time, have put them out of the running and gotten 
practically all the business if there never had been any 
combination.” 

Not until 1895 did the American Tobacco Company 
begin to reach out aggressively after other branches of 
the trade. In May of that year the common stock was 
listed on the New York Exchange. The statement then 
issued was very similar to that made when the pre- 
ferred was listed five years before. Dividends of ten 
per cent had been paid in 1890 and twelve per cent 
each year thereafter. With such a record the stock, of 
course, had a high rating on the Exchange. 

Steps were taken soon afterwards to acquire the ex- 
tensive interests of P. Lorillard and Co., large pro- 
ducers of snuff and plug tobacco. At the same time 
there were reports of negotiations for various other 
concerns. 

The company was assailed from all sides. Suits 
were brought in New York and Illinois to prevent the 
corporation from doing business in those States. Pro- 
ceedings were instituted in New Jersey to nullify its 
charter. 

A second tobacco contest ensued, this time a deter- 
mined struggle between the American and the inde- 
pendent cigarette and plug manufacturers. 

Under attack from so many quarters, political, legal 
and commercial, the newspapers reported that the com- 


94 


AMERICAN TOBACCO CO. 


bine was “fighting for its life.” It was a critical time. 
One emergency after another arose, but Duke met 
them as they came. Keeping his own counsel, seldom: 
revealing his plans, when he had anything to say he 
said it in few words, stating exactly what he meant. 
To those used to the careful phrases and vague state- 
ments with which many corporations concealed their 
operations, his frank, direct announcements came as 
something of a shock. With him to decide was to act, 
and his actions at times surprised his own stockholders 
as well as competitors. 

Holders of American Tobacco common who had de- 
pended on a steady yield were amazed when, in De- 
cember, 1895, its president announced that the usual 
quarterly dividend on the common stock, which in due 
course was expected in February, would be omitted. 
Tobacco stocks broke sharply on the exchange. The 
bears made a vigorous drive on the securities. Many 
of those who were speculating on narrow margins lost 
heavily. Mr. Duke and the company were severely 
criticized, opponents charging that the insiders were 
depressing the stock in order to “clean out the little 
fellows” and buy in the outstanding shares at their own 
figures. 

That was far from the truth. Two months in ad- 
vance Mr. Duke announced that the dividend would 
be passed and stated his reasons as follows: 


To the Stockholders of the American Tobacco Company: 
The usual quarterly dividend of 2 per cent on the pre- 
ferred stock of this company will be paid i in February, but no 
dividend will be paid at that time on its common stock. 
From the earnings of the company during the ten months 
of the current year it is estimated that the earnings of the 
year will permit the addition of over one and a quarter mil- 


95 


JAMES B. DUKE 


lion dollars ($1,250,000) to surplus, after paying 8 per cent 
on the preferred stock and 9 per cent on the common stock. 

Yet, on account of the increasing volume of the com- 
pany’s business and the acquisition during the year of new 
plants and businesses, the company requires more cash working 
capital than heretofore. 

Therefore, in the judgment of its management, it is to 
the interest of the stockholders, and proper for the prudent 
prosecution of its growing business, that the sum necessary to 
pay further dividends on its common stock for this year be 
retained and applied to working capital. 

Thus the business of the company can be properly cared 
for and extended without departing from its consistent policy 
of not borrowing money and its assets kept as they now are, 
the free and unencumbered property of its stockholders, 

Very respectfully, 
Tue AMERICAN Tospacco CoMPANY. 

December 6, 1895. 


Various explanations and speculations regarding this 
action were published. “A large holder of tobacco” 
was quoted as saying: “The tobacco war became viru- 
lent only last summer. Up to that time the company’s 
sales were larger than ever before. Clearly, in the 
last six months the war has resulted in enormous 
losses.” But that was incorrect. The combine’s earn- 
ings had been reduced, but it was still making substan- 
tial profits. 

The treasurer’s annual report, which appeared early 
in 1896, showed that the company’s funds had been 
used in a broad expansion. During the year it had 
purchased three New York concerns, Hall’s “Between 
the Acts” Cigarette Company, H. Ellis and Company, 
and the Consolidated Cigarette Company, and the 
James G. Butler Tobacco Company of St. Louis. 

Behind these purchases were some interesting moves. 
Anti-cigarette agitation was at its height. Long-haired 

96 


MRS. JAMES B, DUKE 








AMERICAN TOBACCO CO. 


men and short-haired women were uttering solemn 
warnings against their baleful effect. Listening to their 
lurid accounts one would have thought the boy who 
hid behind the barn to sneak a smoke was taking his 
life in his hands. ‘Tobacconists were warned not to sell 
to boys, and several States passed laws prohibiting the 
sale of cigarettes. Some of these remained on the 
statute books until the present year, Kansas being last 
to remove the ban. 

This furor over the mildest form of using tobacco 
seems rather absurd to-day when the use of these 
“smokes” is almost universal. But it was serious then 
when the very existence of the “fags” was threatened. 
Curiously enough, the opposition was directed almost 
wholly at the paper-covered cigarette. Those made 
entirely of tobacco escaped criticism. 

If conditions changed, Duke was determined to be 
ready to meet them. Within a few months he bought 
three of the leading makers of all-tobacco cigarettes 
and was prepared to turn them out in quantity. 

“We thought from the way legislation was going 
all over the country that the paper cigarette was going 
to be knocked out,” Mr. Duke explained, “and we 
wanted to be prepared with an organization of people, 
machinery and brands to go ahead with the all-tobacco 
cigarette to take the place of the paper ones.” 

Herman Ellis’ plant was bought to bring him into 
the organization, said Mr. Duke; Hall’s to get the 
popular “Between the Acts” brand, the Consolidated 
to acquire valuable machinery they owned. There was 
a definite object behind each purchase made. 

The effects of the “tobacco war” were reflected in 
the earnings, which had declined to $3,971,521 as com- 
pared with $5,069,416 for the previous year. Profits 
had decreased more than a million dollars, but the 


9 7. 


JAMES B. DUKE 


losses of competitors were much larger in proportion. 
Eight per cent had been paid on the preferred and 
nine per cent on the common stock. The surplus, in- 
vested mainly in plants, had increased $1,402,000 dur- 
ing the year, making the total $8,600,871. 

Two months after the dividend was passed the to- 
bacco combine, in the phrase of Wall Street, “cut a 
melon.” On April 1, 1896, the company announced 
that it would pay a common stock dividend of two per 
cent in cash, and twenty per cent in scrip. The scrip, 
redeemable in common stock, at the option of the com- 
pany, bore six per cent interest payable out of net earn- 
ings after payment of the dividend on preferred. Dis- 
satisfaction on the part of some preferred stockholders 
resulted. One of them, a Mr. Hull, brought suit to 
enjoin payment of the scrip dividend, but the move 
was unsuccessful. His suit was set aside and the scrip 
distributed. 

In the meantime the legal attacks were renewed. 
The suits in the New Jersey courts continued for 
months. On May 7, 1896, Mr. Duke and all the di- 
rectors of the American Tobacco Co. were indicted, 
charged with violating the anti-trust laws. That had 
no marked effect on the combine’s operations, however. 
Mr. Duke felt confident that the company was not vio- 
lating the law, but was thoroughly justified in acquir- 
ing plants engaged in every variety of tobacco manu- 
facture, so as to round out the business. 

In January, 1897, the three per cent quarterly cash 
dividends on the common stock were resumed. In 
March the New Jersey suit against the company was 
dismissed. A month later, at the April period, two 
per cent was paid on the common stock. At the same 
time it was announced that the “secret factor agree- 
ment,” which was one of the things complained of in 
the anti-trust suits, had been abandoned. 


98 


CHAPTER EIGHT 
A Wall Street Battle in Which the Loser Won 


N°? new companies were acquired for nearly two 
years after the “cigarette war” ended and the 
New Jersey suits were dismissed. But the most ag- 
gressive individual in the industry had not been rest- 
ing on his oars. 

Bringing to his support men of large means, Duke 
had taken into the management prominent figures in 
the financial world. Oliver H. Payne, of the Standard 
Oil Co., had acquired a considerable amount of stock, 
bringing the tobacco interests in close touch with the 
Rockefeller group. John G. Moore, Grant B. Schley 
and others had made substantial investments in its se- 
curities. With annual earnings of $4,179,460, a sur- 
plus of $7,447,849, and fresh capital at its command, 
the combine was well prepared to branch out into wider 
fields. 

But Duke had a strenuous struggle, with determined 
opposition from without and within, before his domi- 
nance was incontestably established. 

Earning millions, with larger dividends in prospect, 
American Tobacco was a tempting prize. Many of the 
industrial combinations were organized by bankers, 
who reaped their profits by watering stocks and piling 
up securities as high as the traffic would bear. This 
one had been formed to end costly competition and 
enforce economies. Its stock was represented by plants, 
properties and brands worth in earning capacity if not 
in tangible values what had been paid for them. Or- 
ganizing and conducting the corporation as a commer- 
cial enterprise, paying dividends on every share issued, 
Duke boasted that there was “not a dollar of water in 
the whole concern.” 

Capitalists saw in the company unusual opportuni- 


99 


JAMES B. DUKE 


ties if they could gain control. Duke had his own ideas 
about financing. Certain financiers and at least one of 
his own officials considered him “bull-headed” on that 
point. If they could once gain a majority of the stock, 
as principal owners they could dictate the company’s 
policy. 

The task was not so difficult as might seem. There 
was only $35,000,000 of stock outstanding,—$14,- 
000,000 preferred, $21,000,000 common. Holding a 
considerable proportion of the shares, the Dukes had 
by no means a majority. Others owned large blocks; 
the shares were listed on the Exchange where any one 
might buy. The annual stockholders’? meeting was 
near, when those who held a majority could elect di- 
rectors and officers. 

The plans of his opponents were well laid. Duke 
was no speculator. Busy with his factories and sales 
forces, he paid scant attention to what was going on 
in the stock market. 

Working under cover, engaging James R. Keene, 
the shrewdest manipulator in Wall Street, to “turn the 
trick,” they quietly lined up large blocks, then made 
a drive for control. Not until everything was ready 
to spring the trap, did they come out into the open. 
With millions at his command, Keene bid in every 
share that was offered, and believed he had sufficient 
stock in hand to assure success. 

The manipulators were jubilant. Duke had been 
caught napping, his opponents said: Wall Street had 
taken him into camp. Keene felt so sure of this that 
he told Duke his reign was ended. 

But they were sadly mistaken. “J.B.” might be de- 
feated, but had no thought of surrender. Payne was 
the chief financier behind the move, had furnished, it 
was understood, most of the money for Keene’s opera- 

100 


A WALL STREET BATTLE 


tions. As his advisers debated what should be done to 
meet the situation, Duke ended the conference by say- 
ing: “Pll tell you what I’m going to do; I’m going to 
see Colonel Payne.” 

Though Payne had bought a large amount of To- 
bacco stock, Duke had never met him personally. A 
broker friend offered to arrange an appointment, but 
Payne at first refused, saying he “had no business with 
Duke.” Finally he consented to see him, Duke went 
to his office and they discussed the matter frankly. 

One of the directors, who had been brought into the 
company through the purchase of his factory and dis- 
agreed with its president on many points, had, it ap- 
peared, enlisted Payne and other capitalists in the 
scheme. They planned to place him in charge of the 
corporation’s finances, ousting George Arents, the treas- 
urer. Mr. Duke was to remain operating head of the 
company, it was explained. 

Duke would not consent to any such arrangement. 
While the fight was made ostensibly against the treas- 
urer, Duke realized that it was really aimed at him. 
Whether his opponents had, as they claimed, a major- 
ity of the stock, or not, they had enough to hamper him 
seriously. _ 

“Tf you fellows want to do this,” said Duke, “you 
won’t have to turn me out; [ll quit. If Arents goes, 
Pll go, too, and my crowd will go with me.” 

“What will you do?” Payne asked. 

“Tl sell every share of my stock and start another 
company.” 

“If you leave, I’m going to sell my stock, too,” 
Payne said. He had misunderstood the situation, and 
Duke had won him over in twenty minutes. 

The tables were turned. The hand that had built 
up the big tobacco structure might as easily tear it down. 

101 


JAMES B. DUKE 


With a powerful rival, headed by the most resourceful 
man in the industry, the combine’s supremacy would be 
in danger. The stock in which the schemers had in- 
vested millions might be worth about as much as ticker 
tape. 

Coulis to terms, his former opponents assured Duke 
that he would be left in full control. He would accept 
no dictation; wished it plainly understood that in the 
conduct of the company’s affairs he should be abso- 
lutely unhampered, as he had been—and this was 
agreed to. 

Payne and Schley voted with him in the stockhold- 
ers’ meeting. The very men who had fought him in 
Wall Street became his strong supporters. That was 
the only effort ever made by stockholders or financiers 
to unhorse Mr. Duke or dispute his domination. 
Through the various commercial and financial deals in 
after years, the numerous arrangements which involved 
the larger part of the entire tobacco trade, he was the 
acknowledged leader and directing force. 

The air being full of rumors of mergers, changes 
and deals in the industry in 1898, there were, as is 
usual under such conditions, wide fluctuations in se- 
curities. American Tobacco shares rose to dizzy heights, 
then declined. 

Early in September the price of the common stock 
broke suddenly. In three or four days there was a fall 
of thirty points. Not knowing what was going on be- 
hind the scenes, the public could see no reason for this 
sharp drop, save that the stock had been driven so high 
that the bears found it an easy target. Timorous in- 
vestors sold out, fearful that the expected mergers 
would not be put through. Yet at that very time Duke 
and his associates were putting into effect plans which 

102 


A WALL STREET BATTLE 


resulted in far larger profits, with a corresponding in- 
crease in value of the securities. 

Complaints were numerous, however, of manipula- 
tion by insiders. Speculators who had lost in the de- 
cline and some newspapers were severe in their criti- 
cisms. The Commercial and Financial Chronicle, for 
example, said in an editorial: 


“Politics, the industrials and the wheat market appear to 
have occupied chief attention the current week. Perhaps we 
ought to put, in place of industrials, American Tobacco stock, 
though following, as the break in Tobacco has, the decline in 
Sugar Refining, a tumble such as it has made (about 30 points 
in a few days) in a measure weakens confidence in the entire 
class of issues to which it belongs, and has been an unsettling 
influence to the whole Stock Exchange list. 

“We do not suppose the general public has suffered to any 
great extent in this latest bout. The reasonable presumption is 
that it must have been a very small and a very gullible crowd 
that would have followed the speculation up to the dizzy 
heights the stock was made to climb, and that the week’s 
antics are a result of a struggle between insiders, instead of 
the usual attempt at bleeding the inexhaustible army of inno- 
cents forever vainly groping through Wall Street after a 
short road to wealth, but as a rule finding that all roads from 
that center lead to bankruptcy.” 


But Duke was not responsible either for the fapid 
rise or the sudden fall. 

Not many days later, on October ist, the plans for 
the plug tobacco combine were announced, Half a 
dozen or more leading companies were to be consoli- 
dated in a new corporation, the Continental Tobacco 
Company, to which would also be turned over the plug 
business and plants of the American Tobacco Company. 

Five years previous an attempt had been made by 
others to combine the principal manufacturers of chew- 

103 


JAMES B, DUKE 


ing tobacco, but the effort failed, and fiercer competi- 
tion ensued. The American Company, which upon en- 


tering this field had made only three per cent of the - 
plug tobacco production, was, by 1898, producing dou- 


ble that proportion. 


In April the Duke interests were reported to be ne- 


gotiating for two important St. Louis concerns, the 
Brown and Drummond companies. A month later the 
American stockholders voted $3,100,000 additional 
common stock for “acquiring new enterprises.” But 
the St. Louis deal was not carried through at that time. 

Reports were current all that summer that plans 


were on foot for a plug merger. But this came to pass — 


only after months of negotiation. —LThough Duke was 
the most important factor and eventually became its 
head, he did not originate the proposed consolidation. 

Telling how this was brought about, in his testimony 
years later in the anti-trust cases, Mr. Duke said that 
his company had bought a few concerns manufacturing 
plug, smoking, snuff and other products. He had ad- 
vocated engaging more extensively in plug manufac- 
ture, which was opposed by the Ginter and other inter- 
ests but was finally agreed to. Purchase of the Na- 
tional works stirred up Drummond and other manu- 
facturers and severe price-cutting ensued. “Toddy,” 
the Drummond’s cheap brand, was cut to 14 cents; the 
American retaliated by reducing “Battle Axe” to 13; 
Sorg, Liggett and Myers and others put out cheap 
brands, and there was a lively contest for customers. 
Duke spent large amounts in advertising and pushing 
“Battle Axe” and other brands, which had an enor- 
mous sale. But the game was costly and not very 
profitable. . 

Sometime in 1898, Mr. Duke recalled, Frank Ray 
and a Mr. Hughes called at his offices, saying they had 

104 


DORIS DUKE, JAMES DUKE’S ONLY CHILD 








A WALL STREET BATTLE 


options on several plug factories and wanted to sell 
them. But Duke declined to buy. 

“After several visits,” he said, “they proposed to. 
buy out our plug business and named 2 price which I 
told them I would accept. They went along and hadn’t 
succeeded in financing it or getting in the crowd they 
wanted, and we didn’t pay much attention to them, 
either one way or the other. 

“Tn the meantime Brown in St. Louis had gotten out 
a plug tobacco under a formula that seemed to sweep 
the country. We tried to have it duplicated, couldn’t 
do it, and finally bought Brown’s brand, together with 
the formula. While we were closing that trade, the 
Drummond people wanted to sell their business. They 
offered it at what I considered a cheap price. I advised 
our people that we ought to buy it, and we did.” 

Ray had, meanwhile, organized an underwriting syn- 
dicate to furnish funds to float the merger and wished 
Drummond included. “I told them no, I thought that 
was off, we didn’t want to go into the thing,” Mr. 
Duke said. Finally they proposed to include both that 
and. the Brown concern, as well as the plug business of 
the American, and Duke and his associates agreed to 
enter the combination. 

Duke had no desire to be president of the plug com- 
bine. “I didn’t want it and the reason I became presi- 
dent was this,” he said. “Mr. Ray, Harry Drummond 
and Pierre Lorillard were candidates for the presidency 
of the Continental. I expected to be a director, but I 
didn’t expect to hold any official position because I had 
the American Tobacco Co. to look after. It seemed to 
be quite a contest between these people, and Colonel 
Payne and Mr. Terrell came to me and asked me to 
accept the presidency of the Continental Tobacco 
Company. 

105 


JAMES B. DUKE 


“At first I declined, then they said we had a large 
interest in the concern, they did not believe these fel- 
lows would ever be able to organize and run the thing, 
did not know how it would get along, and thought we 
would lose a lot unless I took the presidency. I con- 
sidered it a while and finally decided to do it, and I 
did.” 

Once the preliminaries were settled, Duke and his 
associates moved swiftly. The Drummond Company 
was bought on October 11th. Six other large concerns 
were acquired and when the Continental Tobacco Com- 
pany was incorporated, under the laws of New Jersey, 
in December, 1898, its broad scope was revealed. With 
a total authorized capital of $75,000,000, divided 
equally into common and preferred stock, there was an 
immediate issue of $30,000,000 each, leaving $15,- 
000,000 in the treasury to be issued later. 

In addition to the plug business of the American 
Tobacco and Drummond companies, the new corpora- 
tion had acquired the business and plants of P. Loril- 
lard & Co., Jersey City, N. J.; the P. J. Sorg Tobacco 
Co., Middletown, Ohio; John Finzer and Brothers, 
Louisville, Ky.; Daniel Scotten and Co., Detroit; the 
Henry Weissinger Co., Louisville, and P. H. Mayo 
and Brothers, Richmond, Va. The Brown factory, 
previously bought, was included in the plants turned 
over by the American. The combined annual output 
was estimated at more than 105,000,000 pounds. 

Separate corporations, the Continental and Amer- 
ican tobacco companies were operated in close accord. 
Though others had prompted the plug merger, Duke 
was at its head and in cities where independent tobacco 
manufacture had figured extensively there was no lit- 
tle bitterness at the prospect that the “trust” would ob- 
tain control of the local plants, reducing their impor- 

106 


A WALL STREET BATTLE 


tance in the industry. This was particularly true of 
St. Louis, which had taken a leading place in the manu- 
facture of plug. 

Expressing the feeling against the combine, the St. 
Louis Globe-Democrat estimated that the Drummond 
plant, bought by the American Company for $3,500,- 
000, could be replaced, with modern appliances, for 
$450,000 to $500,000, and that $ 3,000,000 had been 
paid for the “good-will, trade-mark, etc.’ “The ez 
cetera in this case,” that newspaper concluded, “Gs said 
to represent the trust’s desire to acquire the plant and 
shut off the competition which was hurting it. Only the 
Liggett and Myers concern now remains as a thorn in 
the flesh of the trust, and interesting developments can- 
not long be postponed.” 

Similar comments were made in other quarters. Op- 
ponents of the merger raised the objection that too 
high a price had been paid for the various companies. 
But, knowing the potential as well as immediate worth 
of the concerns, Duke felt sure of his ground. More 
than factories and securities he was buying brands whose 
popularity had been established, companies whose earn- 
ing capacity had been demonstrated and could easily be 
increased. The outcome confirmed his judgment. 
From the first the Continental was successful. 

One concern, the largest in plug manufacture, Lig- 
gett and Myers, remained outside the combination. 
Wall Street had expected that, in some way, that firm 
would be brought into camp, but the owners absolutely 
refused to sell or enter the merger. Speculators made 
much of the failure to acquire the big St. Louis plant, 
which had an annual output of 27,000,000 pounds, and 
used this argument to depress stocks. 

Duke’s next move was to bring into line the Union 
Tobacco Company, in which Thomas F. Ryan and other 

107 


JAMES B. DUKE 


financiers were interested. Desiring its owners more 
than the company, in acquiring this corporation he 
brought into alliance with him not only Ryan but also 
William C. Whitney, P. A. B. Widener, Anthony N. 
Brady and other leading capitalists. 

Voting on March 28, 1899, to increase the common 
stock from $21,000,000 to $56,000,000, the stockhold- 
ers of the American Tobacco Co. amended the charter 
so as to increase the number of directors to fifteen. 
The new directors chosen were Ryan, Brady, and 
Widener. With powerful connections, commanding 
almost unlimited capital, their experience and advice 
as well as their money were of the utmost value. 

Declaring a 100-per-cent stock dividend, to be taken 
out of surplus, in addition to the usual two per cent 
quarterly dividend, the directors cut one of the largest 
“melons,” in the language of Wall Street, on record 
up to that time. With immense earning capacity, the 
combine was revealed as one of the most profitable, as 
well as one of the largest corporations in America. To 
pay the stock dividend $21,000,000 additional common 
stock was issued, the remainder of the new issue au- 
thorized, $14,000,000, being intended, according to re- 
ports, to acquire the Union Tobacco Cempany and for 
other purposes. 

A separate corporation, though closely affiliated aris 
the Continental, the R. J. Reynolds Tobacco Company, 
was chartered it New Jersey with $5,000,000 author- 
ized capital, bringing into the alliance one of the largest 
factories and ablest tobacco manufacturers in the South. 

The Continental, in applying for admission of its 
stock to quotation in the unlisted department of the 
New York Exchange, set forth that of the authorized 
capital of $75,000,000 there was outstanding $31,- 
145,000 preferred and $31,146,500 common stock. 

108 


A WALL STREET BATTLE 


Duke was president; Harrison I. Drummond, Frank 
F. Ray and Oren Scotten, vice-presidents; P. Lorillard, 
Jr., treasurer and D. A. Keller, secretary, and the other. 
directors were Herbert L. Terrell, Marks Leopold, 
Robert B. Dula, Oliver H. Payne, Basil Doerhoefer, 
Joseph B. Hughes, J. B. Cobb, Thomas Atkinson, 
Grant B. Schley and Paul Brown. 

Increasing both common and preferred stocks from 
$37,500,000 to $50,000,000 each, on May 1, 1899, an- 
nouncement was made that Liggett and Myers had 
been acquired by the Continental, the price paid being 
estimated by outsiders at approximately $12,500,000. 

Employing three thousand workmen, Moses C. Wet- 
more, president of Liggett and Myers, stated that dur- 
ing the previous five years the company had made av- 
erage profits of over $900,000 annually, and that there 
were on its books approximately one million pounds of 
unfilled orders for tobacco. “I received at the rate of 
$15,000,000 ($1,366 per $100) for my stock,” Mr. 
Wetmore admitted. 

Three other plants were acquired within the next 
few weeks—the Gradel and Strotz Tobacco Company; 
August Beck and Company, Chicago, and the Buchanan 
and Lyall Tobacco Company. 

The last big rival had been brought into line. The 
Plug Combine was practically complete. 

The earning power of the American Tobacco Com- 
pany was shown clearly in the report for 1898. With 
net earnings of $4,957,804, there was a surplus, from 
all sources, of $22,557,689, including the proceeds 
from ‘the sale of the plug business to the Continental, 
which yielded $11,700,000. A 100 per cent stock 
dividend was issued, deducted from the surplus. 

The American, in May, 1899, listed $12,500,000 of 
additional common stock to acquire the entire capital 

109 


JAMES B. DUKE 


stock of the Union Tobacco Company. Subscribers to 
the Union syndicate, when that was dissolved in July, 
received for each $100 they had actually paid in $170 
par in American Tobacco common stock, a total of 
91,800 shares of $50 each, equal, at par, to $4,590,000. 

Another object which Mr. Duke had long had in 
mind, and had before attempted without success, was 
attained. Through the Union corporation he brought 
into his combination his earliest and most powerful 
rival, Blackwell’s Durham Tobacco Co., whose factory 
had been the largest establishment in his home town, 
and whose hold on the smoking tobacco trade had 
caused the Dukes to turn to the manufacture of ciga- 
rettes. At last the “Bull Durham” brand, which had 
seemed so formidable to him twenty years before, had 
fallen into his hands. 


IIo 


CHAPTER NINE 
Many Companies in One, with Duke in Full Control 


T was a remarkable group of men Duke gathered 
I around him—Ryan, Payne, Widener, Whitney, 
Brady, R. J. Reynolds, Pierre Lorillard, Jr., Benja- 
min N. Duke, J. B. Cobb, C. C. and Robert B. Dula, 
Percival S. Hill, W. W. Fuller, George W. Watts, 
Grant Schley, Charles E. G. Halliwell, F. H. Ray, 
Harrison Drummond, W. R. Harris and many others 
—capitalists, manufacturers and master salesmen who 
understood production, marketing and finance. 

In charge of each activity, buying the raw product, 
manufacturing, shipping, selling, advertising—the 
thousand and one operations involved in these varied 
enterprises—were experts, some with the older com- 
panies from the beginning, others youngsters Duke had 
developed, his “boys” whom he had given a chance 
and who had more than “made good.” 

With buyers in the principal markets abroad—Tur- 
key, Greece, Egypt, India, Sumatra, Cuba, Jamaica, the 
Orient and the West Indies—as well as America; sales- 
men in almost every country and leading city, he had 
created and directed one of the largest and most ef- 
fective industrial machines of modern times. 

Concerning a similar organization, the Standard Oil 
group, William H. Vanderbilt, in testifying before the 
Hepburn Congressional Committee, in 1879, said: 


“T never came in contact with any class of men as smart and 
able as they are in their business, and I think that a great deal 
of their advantage is to be attributed to that. They never 
could have got in the position they are in now without a good 
deal of ability, and one man would hardly have been able 
to do it. It is a combination of men. I don’t believe that by 

Dit 


JAMES B. DUKE 


any legislative enactment or anything else, through any of 
the States, or all of the States, you can keep such men down.” 


What Mr. Vanderbilt thought of the Rockefellers 
and their partners, who organized and ran the first big 
industrial merger, was as true of Duke and his asso- 
ciates. They would have succeeded in any line they en- 
tered, with or without any “trust.” Mr. Duke him- 
self regarded the organization he had built up, the men 
of ability and talent enlisted, as more important and 
effective than plants, capital or corporation. 

The Continental placed firmly on its feet, the Union 
company absorbed; cigarette, plug and smoking to- 
bacco largely in their hands, Duke and his allies began 
to reach out for other branches of the industry. 

Early in 1900 the American Snuff Company was 
formed, with $25,000,000 capital, acquiring the lead- 
ing snuff producers—the Atlantic Snuff Co., Philadel- 
phia; George W. Helme Co., Helmetta, N. J.; the 
Southern Snuff Co., Memphis, Tenn.; Bruton & Con- 
don, Nashville, Tenn.; and the Stewart Ralph Snuff 
Co., Clarksville, Tenn.; the snuff business of the 
American Tobacco Company, which owned plants at 
Baltimore and Helmetta, N. J.; of the Continental, 
which owned the Bowers plant at Changewater, N. J.; 
of the Lorillard factory in Jersey City; W. E. Garret 
& Sons, Inc., and the Stewart Ralph Snuff Co., Phila- 
delphia; and the Dental Snuff Co., Lynchburg, Va. 
These factories were producing some 15,000,000 
pounds of snuff annually. 

Cigar manufacture was next. On January 11, 1901, 
the American Cigar Company was organized, capital- 
ized at $10,000,000. ‘This was beginning on a small 
scale in a big field, but behind it was an idea, that of 
making cigars by machinery. Nearly twenty years be- 

112 


MANY COMPANIES IN ONE 


fore the Dukes had won supremacy by introducing ma- 
chine manufacture of cigarettes. The same thing might 
be done in cigars. Attractive in theory, the scheme did. 
not work so well in practice, but at the time seemed to 
offer large possibilities. Devices for the purpose had 
been invented, and the International Cigar Machinery 
Co. was incorporated, with $10,000,000 capital, acquir- 
ing the patents. 

Cuba, with its famous Vuelta Abajo and other tobac- 
cos, was the home of the cigar, the leading brands 
were made in Havana, and one of the first steps was 
to gain a foothold there. Negotiations were begun for 
the Havana Commercial Company, a $20,000,000 con- 
cern comprising factories producing 100,000,000 
cigars annually. More than a year elapsed before this 
deal was completed, but in the meantime numerous 
other Cuban factories were purchased. 

Mr. Duke was given practically a free hand in carry- 
ing out his expansion program when, in April, 1901, 
the stockholders of both the American and Continen- 
tal approved amendments to their articles of incorpora- 
tion permitting the directors, by a two-thirds vote, to 
guarantee the principal or interest, or both, of securi- 
ties issued by allied companies. Deals involving large 
sums could be quickly made, factories acquired or new 
corporations established under this sweeping authority 
—a flexible means of financing which at the same time 
assured control by the parent companies. 

This broad power was first used the following month 
when the American Cigar Co. secured control of the 
Havana-American Cigar Co. by issuing $4,000,000 of 
four per cent notes, guaranteed by the American and 
Continental. That deal brought in ten large Havana 
factories. Later the Havana Commercial Co., the 
Henry Clay-Bock, the Cabanas and other concerns were 


113 


JAMES B. DUKE 


acquired. The Havana Tobacco Co., capitalized at 
$35,000,000, was organized, and the Duke alliance be- 
came a leading factor in the Cuban industry. 

Customers who puffed fragrant Havanas and could 
pay the price for their Carolina Perfectos, Henry Clays 
and Corona Coronas were given a wide range of choice. 
El Principe de Gales and other favorites were exten- 
sively advertised, and sales rapidly increased. But the 
vast majority of smokers could not afford such ex- 
pensive brands, and Mr. Duke and his aids devoted 
time and attention to them. 

“What is the greatest need of America?” an earnest 
and anxious inquirer asked Thomas R. Marshall, in the 
midst of World War problems. “TI can’t tell you that,” 
drawled the Vice President, as he took a half-smoked 
stump from his mouth; “but one of the greatest is a 
good five-cent cigar.” 

That was one need Mr. Duke sought to supply—the 
best cigar that could be sold for a nickel, as well as the 
better quality for a dime. ‘“Cubanolas” and various 
other brands were put on the market and sold by the 
million. Even the lowly “two-fer”—two for a nickel 
—was not neglected, and the rough and ready cheroot 
and the humble stogie, furnishing a long and lasting 
smoke for a penny or two, were extensively cultivated. 

Cheroot and stogie factories had been picked up from 
time to time, the first bought being P. Whitlock, Rich- 
mond, Va., manufacturers of “Old Virginia” cheroots. 
Stogie plants in Pittsburgh and elsewhere were brought 
together, and the American Stogie Company formed, 
capitalized at $11,976,000, which soon bought the 
United States Cigar Company, owning numerous plants 
that turned out 280,000,000 stogies a year. The com- 
bined factories had an annual production of 700,000,- 
000 stogies. 


114 


MANY COMPANIES IN ONE 


Realizing his ambition, Duke was at last manufac- 
turing every variety of tobacco. The various groups 
operated in close accord, under his direction; but hav- 
ing them in separate corporations was a rather cumber- 
some arrangement. Some means of bringing them to- 
gether in a definite organization was needed. 

On June 5, 1901, a holding corporation, the Consoli- 
dated Tobacco Company, was incorporated under the 
laws of New Jersey, the entire authorized capital of 
$30,000,000 being immediately paid in, in cash. Mr. 
Duke was, of course, the head of it, and the stock was 
owned by the interests allied with him in the American 
and Continental. 

William C. Whitney, the brilliant lawyer who had 
been Secretary of the Navy in President Cleveland’s 
cabinet, was one of Mr. Duke’s chief advisers in the 
formation of the Consolidated, and the conferences 
were held and the articles of incorporation and other 
legal documents perfected at his residence. 

“The leading consideration in the organization of 
the Consolidated Tobacco Co.,” the officials announced, 
‘Gs the importance of concentrating the control of the 
American and Continental companies so as to insure 
their harmonious operation. Each of the old concerns 
owns thirty-five per cent of the stock of the American 
Cigar Company, and their amalgamation will prevent 
the latter company from passing to outside interests.” 

Issuing four per cent fifty-year bonds sufficient to 
cover the outstanding common stock of the older com- 
panies, the Consolidated offered to exchange these 
bonds on the basis of $200 for each $100 of American 
and $100 for $100 par value of Continental common. 
As the American had $54,500,000 common stock out- 
standing and the Continental $48,884,600, a total of 
$157,884,600 was involved. 


115 


JAMES B. DUKE 


Kuhn, Loeb and Co. and Thomas F, Ryan formed 
a syndicate to provide $25,000,000 in cash and facili- 
tate the transfer. Stockholders who were to receive 
more than $70,000,000 of the new bonds agreed not 
to sell until the syndicate operations were completed. 
Mr. Duke and the largest holders announced that they 
would keep the bonds for investment. So the largest 
financial transaction in the tobacco trade, up to that 
time, was readily accomplished and control concentrated 
in a single corporation. 

From time to time the constituent companies acquired 
plants here and there which were advantageous to them. 
On November 1, 1901, the American Cigar Company 
bought the Brown Brothers Company, of Detroit, whose 
annual output was about 40,000,000 cigars. ‘Three 
weeks later the American Tobacco Company purchased 
outright the entire properties of D. H. McAlpin and 
Company, of New York, its most important rival in 
the East. 

In the meantime Mr. Duke had bought Ogden’s in 
Liverpool, and was making a strong bid for the British 
trade, which eventually resulted in an alliance covering 
all the most important foreign markets. 

The combine’s position had not been acquired with- 
out strong opposition. Each new consolidation or pur- 
chase was followed by a fresh outcry. In articles under 
glaring headlines and editorials, newspapers pointed 
out the dangers. Politicians never tired of denouncing 
the concern as a huge monopoly. When tobacco crops 
were large and prices went down, as occurred during 
this period, the farmers blamed Duke and the “trust.” 

Owning nearly all the most popular brands, the com- 
bine, opponents pointed out, could easily establish its 
own stores, and put out of ‘business the thousands of 
small tobacco shops scattered through every city and 

116 


MANY COMPANIES IN ONE 


town. Retailers in leading cities organized, “for mu- 
tual protection,” the Independent Cigar Stores Com- 
pany. A few independent concerns were still manufac- 
turing cigarettes. There were numerous cigar factories, 
producing in the aggregate far more than the Duke 
companies. Many dealers produced their own cigars, 
making them in their shops. 

The combine’s widely advertised brands had to be 
kept in stock to meet demands of customers, but hun- 
dreds of retailers were giving preference to “non- 
trust” goods. Finding a ready market, new cigarette 
factories were beginning to spring up. 

The United Cigar Stores Company, organized not 
long before, began opening stores in various cities. 
There was bitter rivalry, and another tobacco “war” 
ensued, this time in the retail trade. Competition was 
keen, with price cutting and retaliation, until the fall 
of 1903, when a settlement was reached and the contro- 
versy ended. 

Out of this grew the systems of chain stores which 
now dot the country. The “United,” with its thou- 
sands of stores and agencies, stretching from coast to 
coast, selling to more than a million customers a day, 
is one of the best known of American enterprises. Its 
origin and growth is worth recounting. 

On a visit to New York, George J. Whelan, of Syra- 
cuse, seeking a smoke, found there was no tobacco shop 
near. He was surprised. Here in the largest city a 
man had to walk blocks to find a place where he could 
buy cigars or cigarettes. The stores, when he found 
them, were usually ill-kept and uninviting. 

“There ought to be a cigar shop on every corner of 
busy streets,’ Whelan thought, “and they ought to 
be much more attractive in appearance than those dingy 
little places with battered wooden Indians outside and 


117 


JAMES B. DUKE 


show windows heaped with cigars, cigarettes and cans 
of tobacco.” 

That gave him an idea. He was a cigar dealer him- 
self, the youngest of seven brothers who had entered 
the business in Syracuse twenty years before. They 
had succeeded there. Here was a wider field, with 
infinitely larger possibilities. Why not come to New 
York, and establish a chain of tobacco shops? 

Returning “up-state,” he tried to raise capital, but 
met with little encouragement. At last a friend ad- 
vanced him a small amount. Whelan came to New 
York and, in 1901, opened his first store at No. 84 
Nassau Street. It was a tiny shop, but the floor was 
clean, the shelves orderly, and the goods attractively 
displayed. Moreover, the familiar sign that had 
marked tobacco stores for centuries was missing. That 
marked the passing of the Wooden Indian. 

The first day’s receipts amounted to only $3.47, but 
the idea of having a chain of stores appealed to deal- 
ers, some began to operate with Whelan, his brothers 
and others joined in, and the enterprise was started. 

Whelan made efforts to interest the American To- 
bacco officials, but they were at first not very favor- 
able to the project. He had been active in the 
“Admiral” cigarette concern, formed to compete with 
the combine. Mr. Duke was prejudiced against him, 
and did not like the idea of opening chain stores, fear- 
ing it would “upset all these little retailers,” as he ex- 
pressed it, would cut prices and demoralize trade as the 
Gluckstein stores had in England. 

Mr. Cobb, president of the American Cigar Co., re- 
ported that Whelan was going to open stores anyway. 
“Of course we wouldn’t prevent it and couldn’t if we 
tried,” Mr. Duke said. As he was leaving for Eng- 
land, he told his vice-president, Mr. Hill, to watch the 

118 


MANY COMPANIES IN ONE 


Whelan operations, as “if they were going to do any- 
thing great in that line we should have some control 
of it? Before Duke returned, Hill had acquired vir- 
tual control of the United Cigar Stores. 

“When I got back,” Mr. Duke said, “I saw Whelan, 
and he told me of his plans. I advised him against 
slaughtering prices, and he said that wasn’t his idea, 
but to go ahead and build up a business.” There was 
a chance of making a great deal of money in the re- 
tail trade, Whelan felt sure. But Duke thought they 
would find difficulty in organizing the system so as to 
handle it on a profitable basis. He “didn’t think much 
of it,” and stated frankly that his interests would not 
stay in the concern unless it made money. 

But he backed Whelan, gave him a free hand, and 
the “United” rapidly won its way. One thing he told 
Mr. Whelan, however, was that he would fail unless 
he kept goods customers asked for, no matter by whom 
they were made, and he must supply the goods of other 
manufacturers as well as those of the American To- 
bacco Co. 

Capital was made available for the United, stores 
were opened at first by scores, then by hundreds. 
Strategic locations were selected, desirable corners and 
stands that the older dealers never thought any tobac- 
conist could afford. 

New methods of merchandising, display and adver- 
tising were put into effect. Clerks were trained in the 
art of serving customers. In a few years a remarkably 
efficient organization was developed, under which the 
business has grown continually until annual sales now 
amount to nearly $85,000,000 and the company has 
assets of more than $92,000,000. 

The United formed the final link in the chain of en- 
terprises which bound together the tobacco trade of the 


119 


JAMES B. DUKE 


United States. Pursuing the policy of having at his 
command everything necessary for production, Mr. 
Duke had assured a plentiful supply of the commodi- 
ties required in tobacco manufacture. Licorice, largely 
used as a flavoring material, was supplied by the Mac- 
Andrews and Forbes Company. Tin foil, extensively 
utilized in packing tobacco products, was assured 
through purchase of the Conley Foil Company. Par- 
tial ownership in the Mengel Box Company provided 
an adequate supply of boxes. The same applied to 
other lines. 

The Consolidated Company, through which a ma- 
jority of the American, Continental and other stocks 
were held, paid a cash dividend of twenty per cent to 
stockholders in January, 1903, out of profits for the 
previous year. The net earnings for 1902 were $13,- 
291,460, and there was a surplus, after payment of 
interest on the four per cent bonds, of $6,915,206. 
The twenty per cent dividend required $16,000,000. 
Immediately after that was disbursed, the capital of 
the Consolidated was increased to $40,000,000, the 
new shares being sold to the stockholders at par. 

In 1904 the Consolidated, American and Continental 
were all merged into one under the original name, the 
American Tobacco Company, bonds, preferred and 
common stock of the new corporation being issued in 
exchange for their securities. 

When this was effected, the new corporation had out- 
standing some $125,000,000 of funded debt, created 
principally through exchange of stock for merged com- 
panies; $78,000,000 preferred and $40,000,000 com- 
mon stock. With a surplus of $26,000,000 its total 
assets aggregated $274,000,000. 

But that told only half the story. The company and 
allied interests controlled numerous other concerns, in 

120 


MANY COMPANIES IN ONE 


nearly every line of tobacco handling and manufac- 
ture, with large capital and securities, the aggregate 
approaching that of the parent organization. 

Beginning in 1890 with five companies and eight 
plants, the combination had in fourteen years acquired 
150 manufactories, and had grown from a $25,000,000 
corporation to a mammoth aggregation, controlling a 
capitalization, in parent and allied companies, of $502,- 
000,000, according to the estimate of John Moody, the 
financial expert and editor of Moody’s Manual. Wall 
Street authorities estimated the market value of the se- 
curities controlled at approximately $470,000,000. 

Analyzing the tobacco combine, and pointing out the 
difference between that and other industrial combina- 
tions, Mr. Moody in his book, “The Truth About the 
Trusts,” published in 1904, said: 


“The development of the Tobacco Trust from a modest 
consolidation, in 1890, of Eastern tobacco and cigarette 
manufacturers, to a world-combination of every form of 
tobacco production and distribution, is a phenomenon of ab- 
sorbing interest. “To-day the tobacco combine makes its in- 
fluence felt in every clime, and dominates the tobacco in- 
dustry in all its branches on both sides of the Atlantic. It 
grows the raw tobacco, transports it, converts it into its various 
uses in the shape of cigars and cigarettes, chewing tobacco, 
snuff, and so forth, and distributes it to the four quarters of 
the globe. 

“The element of monopoly is comparatively light in the 
Tobacco Trust and its stability and success up to the present 
time have been due quite largely to the fact that its promoters 
have from the beginning recognized this lack of a strong 
monopoly element and have seen that they would inevitably 
be forced to do one of two things: either to progressively 
absorb all competition as rapidly as it might spring up, until 
they finally controlled the tobacco production of the world, 
or else succumb to open competition from all comers, and 


121 


JAMES B. DUKE 


operate entirely on the basis of low-cost production and non- 
inflated capitalization. | 

“The latter course, however, while more conservative, was 
the least inviting, particularly as the combine had started with 
a watered capitalization; and therefore the resolve was doubt- 
less made early in the history of the Trust to progressively 
reach out and control the entire industry, buying in competi- 
tors as rapidly as they might spring up and become formidable. 
That this policy, so bold and venturesome, has, up to the 
present day, succeeded so well, is a living testimonial to the 
genius of the remarkable group of men who stand at the 
head of this wonderful aggregation of consolidated industry. 
The Tobacco Trust to-day stands out a shining example of 
the adherence to an ambitious, bold, aggressive policy in mod- 
ern finance, which, up to the present time, appears to have 
reaped marked success. Like the Copper Trust, it began its 
work with no monopoly, but with the hope of gradually ac- 
quiring one; but unlike the ill-fated copper combine, it has 
never yet ‘fallen down’ in its program. By steady, progres- 
sive steps, now covering a period of fourteen years, it has 
gradually taken unto itself all that is important or profitable 
in the tobacco and its allied industries.” 


But Mr. Duke himself, explaining how the com- 
bine had been developed, declared: 

“TI never bought any business with the idea of elimi- 
nating competition. It was always with the idea of an 
investment, except probably in the one case of the 
Union Tobacco Company, and in that case we had an 
idea of getting in with ourselves a lot of rich financial 
people to help finance our properties.” 

The Consolidated corporation, he explained, was 
formed to provide working capital for the American 
and Continental, and served its purpose. After the 
Supreme Court’s decision in the Northern Securities 
case, which made doubtful the legality of all holding 
corporations, the directors decided that the Consoli- 

122 


MANY COMPANIES IN ONE 


dated should not be continued as a holding company, 
and that all three concerns should be merged into one 
corporation, with direct ownership of the properties. 
That was done in the American Tobacco Company. 

The simpler form of organization was easier for the 
public and investors to understand, Mr. Duke pointed 
out; permitted more effective handling of the business, 
“put our securities on a better basis, and I think helped 
everybody connected with it.” 


123 


CHAP TE Raa 
British and Americans in a World-Wide Alliance 


has trade had been a prime consideration with 
the Dukes from the beginning. Sending repre- 
sentatives through Europe and Asia, to South Africa, 
India, Java, Australia and New Zealand, they had built 
up a flourishing business in those countries, as well as 
in China and Japan. Following the formation of the 
American Tobacco Company, this custom had been con- 
siderably extended. Yet the aggregate was small in 
comparison with the domestic sales. 

When the tobacco interests of America were firmly 
welded together, Mr. Duke’s mind naturally turned to 
other countries. There were boundless possibilities in 
Europe and the Orient, but British manufacturers were 
cutting into his trade in China and elsewhere. Duke 
decided to compete with them on their own ground. 

Tobacco being one of the few commodities protected 
by high tariff in free-trade England, the trade was 
jealously guarded. The American Company main- 
tained a depot in London and was doing well there, but 
made-in-England goods had first call in the British 
market. The only way to get a firm foothold was to 
gain control of some established British firm manufac- 
turing well-known British brands. 

Beginning his campaign in the fall of 1901, Duke 
invaded England as calmly and assuredly as if he had 
been going across the river to New Jersey to buy a 
local factory. Reaching his London office, he looked 
over the products of the chief English manufacturers, 
learned their comparative positions, size of their fac- 
tories, output, capital and the popularity of the vari- 
ous brands. “In two days,” he said, “I decided that 
I wanted control either of Player’s or Ogden’s.” 


124 


WORLD-WIDE ALLIANCE 


Going to Player’s at Nottingham, stating precisely 
what was contemplated, he asked what they would sell 
for, lock, stock and barrel. They named too high a 
price. Proceeding next to Ogden’s at Liverpool, he 
made them an offer which the managers were willing 
to accept. Within a few days the directors approved 
the deal, subject, however, to the sanction of the stock- 
holders. Acquiring the entire capital stock of Ogden’s, 
£200,000 (approximately $1,000,000), and the £60,- 
000 ($300,000) of its 444 per cent debenture bonds, 
he took possession. 

His object, as Mr. Duke emphasized, was not to 
form a trust in England or control the British industry, 
but merely to obtain a share of the business and prevent 
them from cutting in on his foreign trade. The Brit- 
ishers, however, would not have it so. Sounding the 
alarm, they pictured him as a powerful invader, threat- 
ening to capture their factories and interests. 

“They showed up at Ogden’s the day the stockhold- 
ers met and tried to queer my deal by offering to pay 
a higher price,” Mr. Duke related. “But the Ogden 
directors stood by their agreement, and we bought the 

business.” 

Led by W. D. and H. O. Wills and others, the 
principal British manufacturers organized the Imperial 
Tobacco Company of Great Britain and Ireland, to 
fight Duke and his allies. 

It was a battle royal. The Americans began to ex- 
tend the scope of Ogden’s, and were prepared to ac- 
quire other concerns as opportunity offered, not only 

in England but on the Continent. Going into Germany 

in December, the Jasmatzi cigarette works in Dresden 

were bought and overtures made for an interest in the 

plants of Kyriazi Brothers of Berlin. At the same time 
125 


JAMES B. DUKE 


there were rumors that their field of operations would 
be extended into Russia. 

With £15,000,000 ($75,000,000) capital, the Im- 
perial Tobacco Company was striving energetically to 
line up every British manufacturer and dealer who 
could be induced to join in the attempt to drive the 
Americans from the field. Having scored an impor- 
tant victory in enlisting the codperation of the Salmon 
and Gluckstein interests, the largest tobacco chain stores 
in the Empire, operating more than two hundred stores 
in London alone, the Imperial, considering the time 
opportune to shut out the Americans, played its trump 
card. This was no less than an attempt to start a boy- 
cott that would close the doors of British tobacco stores 
against the Duke products—those made in England as 
well as goods of American manufacture. 

Springing a novel proposition on the British retailers, 
the Imperial offered a large bonus to all who would 
agree not to handle or display any goods but theirs for 
a term of years. Dealers were given only a few days 
in which to sign. 

So sudden and unexpected was the stroke, offering 
such a decided advantage to the dealers, that its pro- 
moters thought the coup could not fail. Duke and 
the principal owners of Ogden’s were across the At- 
lantic, three thousand miles away. Taking them by 
surprise, the plan was to have the British dealers’ ex- 
clusive contracts signed, sealed and delivered before 
the American rivals could checkmate the move. 

Quick decision was required. Duke did not hesitate 
an instant. When news of the Imperial’s proposition 
was cabled to New York, he called his advisers in con- 
ference to consider what steps should be taken to meet 
the situation. Deciding on immediate action, he pro- 

126 


WORLD-WIDE ALLIANCE 


posed a plan which, though tremendously costly, would 
completely knock out the Imperial scheme. 

That was to give the entire profits of Ogden’s, some 
$200,000 a year, to its customers and in addition to give 
them in cash as a bonus approximately $1,000,000 an- 
nually for four years, if they would purchase and sell 
Ogden’s goods. No strings were tied to the offer; no 
demand made that the Imperial products be excluded. 
In fact, it was plainly stated that dealers were not 
asked to boycott the goods of any manufacturer. That 
was the stroke that won the battle. 

The circular in which this was announced, bold, clear, 
straightforward, was written by Mr. Duke himself and 
is so characteristic of the man and his methods that it is 
given below in full: 


“Commencing April 2, 1902, we will for the next four 
years distribute to such of our customers in the United King- 
dom as purchase direct from us our entire net profits on the 
goods sold by us in the United Kingdom. In addition to the 
above, we will, commencing April 2, 1902, for the next 
four years distribute to such of our consumers in the United 
Kingdom as purchase direct from us the sum of £200,000 per 
year. The distribution of net profits will be made as soon 
after April 2, 1903, and annually thereafter, as the ac- 
counts can be audited and will be in proportion to the 
purchases made during the year. The distribution of the 
£200,000 per year will be made every three months, the 
first distribution to take place as soon after July 2, 1902, 
as accounts can be audited, and will be in proportion to the 
purchases during the three months’ period. To participate in 
this offer, we do not ask you to boycott the goods of any other 
manufacturer.” 


Cabling his proposition to London, Mr. Duke 
ordered it sent out immediately to the entire trade. 
127 


JAMES B. DUKE 


Next morning the offer was telegraphed to seven thou- 
sand retailers throughout the British Isles. Many 
dealers had resented the demand of the Imperial that 
they bind themselves, with hardly time for considera- 
tion, in a hard-and-fast agreement to handle only Im- 
perial goods. When the Ogden’s offer was received, 
there was instant reaction. 

Thousands flatly refused to sign the Imperial agree- 
ment. Others ignored it. Duke’s proposition had 
freed them from galling restrictions. There was such 
resentment against the British combine that one large 
London house issued a statement that, as the Imperial 
Tobacco Company was really competing with the re- 
tailers, it would not in future sell the Imperial’s brands. 

The victory was decisive, but by no means complete. 
Duke had effectually prevented the boycott of Ogden’s, 
but the Imperial, which comprised most of the leading 
manufacturers and brands, still held the bulk of the 
trade. Sailing for England, Mr. Duke pushed ener- 
getically the business of Ogden’s. A widespread con- 
test ensued, prosecuted vigorously by all concerned, 
involving price cutting, as well as large bonuses and 
considerable losses on both sides. 

Carrying the war into the United States, the British 
manufacturers announced the purchase of an American 
headquarters in Richmond, Va., proposing to erect a 
large factory there and enter into direct competition 
with the Americans. A few months previous the Im- 
perial had purchased Mardon, Son & Hall, Limited, of 
Bristol, and were planning to acquire other large con- 
cerns. 

Having won a place in Great Britain, Duke was 
getting his share of the trade, but at heavy cost. The 
game was not worth the candle. 

Why should the British and Americans keep fight- 


128 








BRITISH-AMERICAN BANQUET MENU—CABLES SENT BY DUKE 








“ee 





hut o> 











WORLD-WIDE ALLIANCE 


ing each other, wasting money and energy? He felt 
about this very much as he had concerning the New 
York, Richmond and Durham cigarette makers when 
they were slashing at each other before the American 
Tobacco Company was formed. Conditions were dif- 
ferent, it was true. Trade in many lands was involved. 
But there must be some way in which they could work 
together harmoniously and profitably. 

Determined not to be boycotted, Duke was prepared 
to defend his rights as long as necessary, but was will- 
ing to treat at any time fair terms were offered. 

The initial overtures came from the owners of the 
Imperial: Mr. Wills, whose uncle, Sir William Henry 
Wills, later Lord Winterstoke, was head of the leading 
tobacco firm in England and largely interested in the 
Imperial, in June, 1902, wrote a private letter to 
Thomas F. Ryan, inviting him to England, intimating 
that they would like to take up negotiations to settle 
the differences between the Ogden and Imperial in- 
terests. 

“T hesitated about going, and made up my mind not 
to go,” Mr. Ryan said. “I didn’t know anything about 
the business and told them if they wanted to talk to 
anybody, they would have to talk to Mr. Duke and 
Mr. Fuller. I answered the letter, they finally cabled 
and in response to that cable I sailed in August. I 
met Lord Winterstoke and had a great many meetings 
with him.” 

Lord Winterstoke had the officers of the Imperial to 
lunch and dinner with Mr. Ryan, and they got ac- 
quainted. After two or three meetings, Mr. Ryan 
said, he had not the slightest idea anything would be 
done. But Mr. Duke had agreed to come to London, 
if there was any real business. The British investors 
seemed anxious to make some kind of arrangement, 

129 


JAMES B. DUKE 


and Ryan, some ten days after he arrived, cabled for 
Duke, who sailed at once. 

After Mr. Duke arrived the negotiations became 
definite, Mr. Ryan recalled. As they began to work 
out the plans Duke cabled to New York for his at- 
torney, and further conferences were held. The pur- 
pose was, of course, to arrive at an understanding that 
would bring about harmonious relations between the 
Imperial and American interests. Finally this was 
accomplished, along lines worked out by Mr. Duke, the 
terms agreed upon and two contracts carrying them 
into effect were executed on September 27, 1902. 

The Consolidated Tobacco Company, the Duke- 
Ryan corporation, acquired the British rights in 
America, the Imperial bought the American rights in 
England, and together they formed a corporation to 
handle the remaining trade. 

Transferring the business of Ogden’s to the Im- 
perial, a joint stock corporation was formed, the 
British-American Tobacco Company, Limited, with a 
capital of £6,000,000 (approximately $30,000,000) to 
represent the tobacco interests of both countries in the 
Orient and other parts of the world outside their own 
territories. 

Mr. Ryan, who had returned to America before the 
negotiations were concluded, announced that “the Con- 
solidated Tobacco Co. will now pursue its business in 
the American field, including not only the United 
States, but Cuba, Porto Rico, the Hawaiian Islands, 
and the Philippines. The Imperial Company will 
carry on the business in the United Kingdom of Great 
Britain and Ireland, including Scotland and Wales. 
In the new British-American Tobacco Company, Lim- 
ited, the Imperial Company has one-third of the stock, 

130 


WORLD-WIDE ALLIANCE 


and the Consolidated Tobacco Company two-thirds. 
The British-American Tobacco Company will carry on 
the entire business in all foreign countries, including 
India, Canada and Australia.” 

That marked the end of the conflict. The result was 
entirely satisfactory to Mr. Duke. In the negotiations 
with the British manufacturers and financiers, his fair- 
ness, ability and consideration were so evident that he 
won not only their respect but esteem. Former rivals 
became his warm friends. The very men who had 
fought him so vigorously voted to place him in control 
of the corporation which was to represent them in for- 
eign lands—a tribute to the man, as well as the manu- 
facturer and merchant. 

Mr. Duke announced this achievement in five or six 
lines. Scratching a few words on a sheet of Carlton 
Hotel note-paper, he handed two messages to his sec- 
retary, M. E. Finch, for transmission by cable to 
America. One was to Oliver H. Payne, the Standard 
Oil millionaire and early partner of John D. Rocke- 
feller, who had been for years one of Mr. Duke’s chief 
backers and associates. This read: 


aS * 
OL. Payne: 
“Papers signed insuring great deal for our companies. 
“DUKE.” 


He started to write “completing” as the third word, 
then scratched that out and changed it to “insuring.” 


The other cablegram was to his father, Washington 
Duke: 


“W. Duke, 
Durham, N. C. 
“T have just completed a great deal with British manu- 
facturers, covering the world, securing great benefit to our 
companies.” 


131 


JAMES B. DUKE 


“This cablegram sent immediately after the closing 
of the deal,” Mr. Finch commented, “was characteristic 
of Mr. Duke’s great affection for his father, who, as 
you recall, was a very old man at that time.” 

The tobacco treaty was not to go uncelebrated. On 
the evening of October 7, 1902, Mr. Duke gave an 
elaborate banquet to the directors of the British- 
American Tobacco Company. The scene was the 
“Charles II” dining room of the Carlton Hotel. 
Around the table were gathered leaders of the tobacco 
industry in Europe and America. On Mr. Duke’s 
right sat Sir William Henry Wills; on his left, Wil- 
liam C. Whitney. Next to Sir W. H. Wills was Mr. 
Fuller, the Dukes’ attorney and counselor. The other 
guests included Charles Edward Lambert, Harry 
Payne Whitney, James Inskip, John Dana Player, 
William Nelson Mitchell, John MacConnal, Percy 
Callaghan, Walter Butler, H. W. Gunn, Percy Handle 
Walter, William Goodacre Player, William Barker 
Ogden, John Blackwell Cobb, Henry Herbert Wills, 
Ernst F. Gutschow, Hugo Von R. Cunliffe-Owen, 
Thomas Ogden, Thomas Gracey, Morton Easley 
Finch, Percy Ogden, William Plender, Harold Ar- - 
buthnot, Joseph Hood, William Rees Harris, Robert 
Henry Walter, and George Alfred Wills. 

London, accustomed as it is to elaborate social func- 
tions, was impressed. The newspapers spoke of the 
significance of the occasion which marked the bringing 
together of industrial leaders of Great Britain and 
America, and the partition of the tobacco trade. 

Illustrated journals reproduced the elaborate menu, 
which bore on its front the crossed flags of the two 
countries and photographs of Sir William Henry Wills 
and Mr. Duke, and the legend, “In Union There is 

132 


WORLD-WIDE ALLIANCE 


Strength.” Under the heading “A Millionaire’s 
Dinner Party,” the Illustrated London Mail said: 


“Mr. J. B. Duke, one of the heads of the British-American 
Tobacco Company, Limited, recently gave a dinner at the 
Carlton Hotel, London, to celebrate the great amalgamation. 
His guests, as will be seen from our second illustration, taken 
from the fourth page of the Menu, constituted a remarkable 
gathering, including as they did thirty members of the most 
prominent Tobacco Houses in England and America. The 
Menu, the cover of which we reproduce by permission of 
Messrs. Waterlow Brothers and Layton, was beautifully de- 
signed, and printed in gold and bound with white silk. After 
the dinner several of the American guests ordered them in 
hundreds to send to their friends ‘across the way.’ ” 


Picturing the scope of Mr. Duke’s accomplishment 
and the significance of the arrangement which this ban- 
quet celebrated, Mr. Fuller wrote afterwards: 

“To fortify his trade and protect his foreign markets 
he went across the waters to attack in their own citadels 
the British manufacturers who were menacing his trade 
in the East, and to cause them to withdraw from the 
fields he had discovered and the markets he had made. 

“Those who understood the genius of the British 
merchant, whose vessels sailed every sea and who 
acknowledged no limits save those of the planet, can 
surmise what this meant. ‘Tobacco was one of the very 
few commodities protected by a tax in a free-trade 
country, the trade in which they were asked to divide 
with a foreigner. It seemed to ask them to desert 
their traditions as well as to yield their profits. Duke 
accomplished his purpose, and with so little friction 
and with so much equity that it was not a nine days’ 
wonder. 

“At a dinner given in honor of the consummation 


133 


oe 


JAMES B. DUKE 


of the negotiations, which began shortly after Duke 
reached England, during Mr. William C. Whitney’s 
reply to a toast in praise of his own patriotic work in 
rebuilding our navy, the great Secretary laid his hand 
on Mr. Duke’s shoulder and said: 

“Tt is such marvelous merchants as this man who 
make a great navy necessary to carry and protect a trade 
which seems to know no bounds.’ 

“This tribute to successful effort was praise indeed, 
but his keenest satisfaction from this international 
triumph came to him in the knowledge that he had got- 
ten an almost unlimited and more lasting market for 
the tobacco made by his own people on their small 
farms. 

“Tf he had dreamed dreams, they had all come true, 
and if delight in conquering was his ruling passion, it 
was likely to waste away now for want of other equal 
fields. What he did was to set himself at once to the 
more thorough organizing and development of the 
spheres of trade he had brought within his ever ex- 
tending lines.” 

Mr. Duke’s own arrangements for this elaborate 
banquet were very simple. Turning to his associates, 
he said with a smile: “Fuller, you take charge of the 
grub; Cobb, you get the wines.” Never relishing 
“putting on frills,” he desired everything about this 
occasion done in the best of style. It was, and he thor- 
oughly enjoyed it. 

Having consolidated the tobacco interests of America 
and made the British his allies, Duke, with redoubled 
energy, set about seeking larger foreign trade. Un- 
usual enterprise had already won for him the leading 
position in China and Japan. After his cigarettes were 
introduced in Japan, that country imposed a heavy 
import duty, threatening exclusion of the American 


134 


WORLD-WIDE ALLIANCE 


product. Building a chain of factories, Duke began 
manufacturing cigarettes there, and within a few years 
was making and selling three billion cigarettes annually 
in the Flowery Kingdom. Japan raising very little 
tobacco, the heavy duty was on the manufactured, not 
the raw product. American tobacco used in the Japa- 
nese factories eventually furnished a market for 
10,000,000 pounds of Southern leaf. An even larger 
custom was built up in China, and the trade extended 
throughout the Far East. 

Before establishing factories and spending several 
million dollars in Japan, Mr. Duke sought some as- 
surance of the safety of his investment, in case the 
Japanese Government should decide to take over the 
properties and make tobacco manufacture a government 
monopoly. Calling on John Hay, Secretary of State, 
Mr. Fuller discussed the matter. Mr. Hay cabled 
the American minister in Tokio, and received a 
favorable reply. But on one important point the 
Japanese proved decidedly elusive. That was in re- 
gard to payment for brands and good will, more valu- 
able than the factories. State Department representa- 
tives could not pin them down on that point. At last 
Mr. Hay said, “I’ve gone as far as diplomacy will 
permit. I suggest you see the President.” 

Mr. Duke and his attorney went to Washington, and 
Secretary Hay accompanied them to the White House. 
Received cordially by the President, Mr. Roosevelt 
said he knew about the matter, and remarked: 

“Tt is all perfectly straight, now they are trying to 
wriggle out of it. We will make them do it.” 

Diplomacy, however, failed to bring this about, but 
Duke found a means of accomplishing it through his 
own representatives. Japan did, in a few years, create 
a tobacco monopoly, a possibility Duke had foreseen, 


135 


JAMES B. DUKE 


taking over his interests. But he secured payment for 
the brands and good will, as well as the physical prop- 
erties. 

Establishing factories and depots at strategic points 
in China and other Oriental countries, salesmen were 
sent far into the interior, penetrating at times to remote 
regions where white men had never gone before. 
Camel and pony caravans were organized, carrying 
goods hundreds of miles over untraveled routes. In 
regions where there was hardly a road, salesmen were 
carried in chairs by native bearers. 

Making friends of the local dealers, treating them 
liberally, the goods were introduced and a steady cus- 
tom created. In myriads of tiny shops, thatched stores 
and bamboo huts the Duke products were sold, and 
their colored lithographs and displays, printed in the 
native language, were the most familiar signs. 

Tobacco had been raised in China since 1660, mil- 
lions of pounds were produced, but it was strong and 
bitter stuff, smoked only in tiny pipes. American to- 
bacco, mild and sweet, in cigarette form, caught the 
Chinese fancy. Many years ago, as William G. Shep- 
herd recounts in a recent article in Collier’s, “cartons 
of cigarettes were sent from America to Chinese firms 
to distribute. Customers took to them immediately. 

“Then the American tobacco men got an idea—‘cig- 
arette pictures, a picture to a package. China took 
the idea without a halt. Pictures of Chinese statesmen, 
going back to heroes of over two thousand years ago, 
led in popularity. Next came a series of pictures 
showing the birds of China. These pictures were 
drawn by the best Chinese artists, and it became a 
vogue to attempt to secure the entire series. 2 

“To-day the Chinese smoke 40,000,000,000 ciga- 
rettes a year, as against America’s 90,000,000,000, and 

136 


WORLD-WIDE ALLIANCE 


American tobacco advertisements appear constantly in 
all the Chinese magazines and newspapers.” 

The methods originated by Duke, pursued first by 
his firm and later by the American Tobacco Company, 
were continued and extended by the British-American, 
after that company came into existence. Distributing 
the product in some countries through local subsidiary 
companies, in others by direct depots or agencies, the 
company’s policy was to send out the most capable rep- 
resentatives and salesmen that could be found. Not 
confined to Britons or Americans, these included men 
of various nationalities. Managers were encouraged 
to employ as much local and native talent as could be 
used. Thus the various branches were firmly rooted 
as local institutions. 

Catering to the tastes of different nationalities, de- 
voting as careful attention to the vendor in India or 
the Chinaman in his bamboo shack as to the dealers in 
European cities, this corporation is truly international. 

Not long ago a college president, returning to 
America after spending years in the Far East, replied: 


““There are three great agencies in China, the missionaries, 
the British-American Tobacco Company, and the Standard 
Oil Company, with one accord—‘Let there be light.’” 


All through the Orient the tobacco company is re- 
garded not only as a commercial pioneer, blazing the 
way in trade, but as a distinct civilizing influence. Fair 
dealing and considerate treatment have led the native 
merchants to consider the tobacco men their friends and 
partners. The factories and depots in cities and ports 
are local enterprises, by no means foreign to those who 
work in or deal with them. 

This is due to the high character of the representa- 
tives, as well as to the general policy of the company. 


137 


JAMES B. DUKE 


Many of them, living abroad for decades, have become 
thoroughly identified with local interests. Experts in 
their line, they are outstanding individuals who would 
measure up well in any community. 

One of the men Mr. Duke chose to direct his enter- 
prises in Japan, and who continued there until the 
Japanese made tobacco manufacture a government 
monopoly, was Captain E. J. Parrish, who in the early 
days had been the Dukes’ local rival, selling his “Pride 
of Durham” smoking tobacco in competition with them. 
Experienced in every branch of the trade, as manu- 
facturer, buyer and warehouseman, he was an example 
of the able, energetic emissaries who built up the trade 
in other countries. 

Long before the British-American was organized 
men were sent to Java, Sumatra, the Straits Settle- 
ments, the Philippine Islands, Siam and Burma as well 
as to China and Japan. Among these was James A. 
Thomas, whose special field was China. Meeting him 
in the elevator at the New York office as he was pre- 
paring to leave on a trip extending from Calcutta to 
Shanghai, Mr. Duke, noticing in his hand a formidable 
typewritten document, asked what it was. Informed — 
that it was from the Export Department, embodying 
the instructions his representative was to follow on 
arrival in India, he tore up the forty page memo- 
randum, threw the pieces in the waste basket, and said: 

“The last man I sent out to India had a list of in- 
structions, but he did not do anything. If you are 
starting for India with so many instructions, I think 
you had better not go. 

“You will make some mistakes in India,” he re- 
marked. “I make them every day; but don’t make the 
same mistake twice.” 

One of the things to be settled on this trip was the 

138 


WORLD-WIDE ALLIANCE 


case of a retail dealer in Java who had copyrighted one 
of the Duke brands then owned by the American To- 
bacco Company, and from whom, after six years of. 
correspondence, the company could get no satisfaction. 
Getting out his files, which began with his first order 
in 1884, showing a number of letters signed by James 
B. Duke, stating how his firm appreciated the interest 
he was taking in their goods, and inviting him if he 
should ever come to the United States to call upon 
them, the dealer said he had copyrighted the brand 
solely in the interest of W. Duke Sons and Co., who 
were friends of his. Told that Mr. Duke was presi- 
dent of the American Tobacco Company, he gave up 
his rights and made the transfer there and then, re- 
fusing any pay for it. To reward his friendliness and 
confidence, his wife was presented with a silver tea 
set, which this Javanese family treasured as having 
been sent to them by their American friend. 

Chinese tobacco dealers, seeing Mr. Duke’s photo- 
graph in the company’s office in China, asked who he 
was. Looking at the picture earnestly, concluding that 
he had a “good face,” they were certain he was a “good 
man,” and felt like sending him a present. Deciding 
to have two lions, each weighing a thousand pounds, 
carved out of granite, they placed the order in Ningpo, 
and took up a collection among the Chinese tobacco 
dealers. Hundreds contributed, the contributions 
varying from one copper to a dollar. The total cost 
was about $1,000. ‘The lions, carefully packed for 
shipment, were sent to Mr. Duke’s place at Somerville, 
N. J., with a book containing the names of the con- 
tributors, in Chinese and in English. It was their 
voluntary contribution to the ornamentation of his 
home. 

Having, as a rule, a high sense of business honor, 


139 


JAMES B. DUKE 


the Chinese become warm supporters once one gains 
their confidence, and Mr. Duke had that to a marked 
degree. Mourned in China, as in America, his Ori- 
ental customers felt that in his death they had lost a 
valued friend. 

One of the foremost of Chinese merchants, Mr. 
Cheang Park Chew, generally known as Mr. Wing 
Tai, of Shanghai, wrote to Mr. George G. Allen, of 
the British-American Company in New York, sending 
a check for $1,000, stating that he presumed a monu- 
ment would be erected to Mr. Duke, and he wished to 
make a contribution toward it. Owing so much to 
Mr. Duke, the Chinese merchant explained, and con- 
sidering him so largely responsible for his success, he 
wished to pay this tribute to his memory. 

Translations from the vernacular press in China 
were frequently received containing complimentary 
remarks about this manufacturer whom the Chinese 
had never met and knew only through selling his 
tobacco. 

Mr. Duke’s grasp of conditions in other countries 
and his promptness in deciding how to deal with them 
often surprised his foreign representatives. 

Deciding to produce a cigarette in China that could 
be sold for a copper a package, Mr. Duke, explaining 
that he had an urgent engagement and was in a hurry, 
asked the manager of his Chinese business to go along 
in the car with him. Discussing the details as the 
automobile sped through the streets, as they parted, 
he said: 

“You put out that cigarette in China immediately, 
and don’t stop unless you receive a letter or a cable- 
gram from me to do so.” 

In this brief ride his representative had been in- 
structed to buy land, build a new factory and buy 

140 


WORLD-WIDE ALLIANCE 


twenty million pounds of tobacco for this cigarette, 
putting it on the market in the way they had agreed 
upon. 

Arriving in China the following month, ten days 
later he received a cablegram from Mr. Duke inquir- 
ing whether the land and tobacco had been bought and 
the factory was under construction. The work was 
already under way. Introduction of this cigarette in 
China increased the sale of all the better grades for 
which the tobacco was grown in the Carolinas and 
Virginia. It was Mr. Duke’s own idea that gave the 
Chinese that important factor in the trade, “five ciga- 
rettes in a package for a copper.” 

Southern leaf was selling at low prices. India and 
China, with their vast populations, were growing enor- 
mous quantities of tobacco, and had done so for cen- 
turies. It seemed almost futile to undertake introduc- 
tion there of American-grown tobacco. But Duke de- 
cided to go on with the proposition in the big way he 
had outlined. 

After they had estimated how much tobacco would 
be necessary to carry his plan into effect, Mr. Thomas 
asked: “Mr. Duke, how long will it take you to double 
the price of tobacco in the two Carolinas and Virginia 
and add $15 an acre to the value of the land which 
grows this tobacco?” ‘Thinking a moment, he replied: 
“Tt would take about twenty years.” As a matter of 
fact, the price was doubled in little more than half 
that time. 

Speaking of China, Mr. Duke inquired the dis- 
tance between two towns. Told it was approximately 
a thousand miles, he said, “Go and build a railroad 
there and create a wage for the people, and you will 
be helping the whole country.” He often spoke about 


141 


JAMES B. DUKE 


harnessing the Upper Yangtze River, and what could 
be done with its water power. 

In constructing factories and other buildings abroad, 
he impressed upon his managers that he did not want 
any “fancy work” put on them. Durability and suc- 
cess in the undertaking were the most important points. 

The British-American Tobacco Co., founded and 
conducted on this sound basis, stands to-day as one of 
the most efficient organizations of the kind in existence. 
Doing an immense business in the Orient, with fac- 
tories and agencies in China, India, Australia, New 
Zealand, the Straits Settlements, in Egypt and other 
parts of Africa; its agents stationed at the producing 
centers of Greece and Turkey, the company’s trade 
lines extend across Europe, through Switzerland, Hol- 
land, Belgium, Denmark and Finland. With large 
establishments in Canada, Mexico, the West Indies, 
and Panama, in Brazil, Argentina, Venezuela and 
Chile, it is also the largest distributor of tobacco 
products, outside of the United States, in North and 
South America. 

In Shanghai are two factories which turn out 20,- 
000,000 cigarettes a day—two billion a month. There 
are other plants in Hang-Kow, Tientsin, Tsing-Tau, 
and at Mukden and Harbin, in Manchuria. All these 
are in one country, China, but this gives some idea of 
the international corporation’s immense output and sale. 

After the dissolution of the American Tobacco Com- 
pany, Mr. Duke for several years devoted the major 
part of his attention to the British-American, becom- 
ing Chairman of the Board. From the beginning he 
had, in a general way, supervised its operations. But 
the British stockholders wished him to take a more 
active part in its management, to have the whole or- 
ganization under his personal direction. 

142 


WORLD-WIDE ALLIANCE 


The opportunity came when the American combine 
was dissolved. Each of the succeeding companies had 
been placed in the hands of competent executives who | 
had been his aides and associates. Managing any one 
of these smaller concerns did not appeal to the man 
who had been at the head of them all. Greater oppor- 
tunities were presented in the foreign trade. The 
British-American Company offered attractive induce- 
ments, and he accepted. 

The corporation’s main offices being in London, nec- 
essarily spending much of his time in England, Mr. 
Duke set up an establishment there, as well as in New 
York. This led to the impression in some quarters 
that he had taken up his permanent residence in Eng- 
land. Some newspapers violently attacked him, re- 
porting that he had “deserted America” and trans- 
ferred his allegiance to Great Britain. A few went so 
far as to state that he had become a British subject. 

Nothing was farther from the truth. The thought 
of renouncing American citizenship had never entered 
his mind. Abroad when the World War broke out, 
caught, like thousands of Americans, in the war zone, 
Mr. Duke had difficulty in arranging his affairs and 
getting passage to America. This gave fresh currency 
to the reports of his change in allegiance, which were 
published in the North Carolina as well as the New 
York newspapers. Further, they alleged that the 
tobacco magnate had left America in order to avoid 
paying income tax. Paying no attention to such pub- 
lications, Mr. Duke had never taken the trouble to 
enter a denial. 

Resenting the injustice which was creating a false 
impression among his own home people, one of his 
former partners, George W. Watts, wrote to the news- 
papers, explaining the entire matter, and making public 


143 


JAMES B. DUKE 


a letter which Mr. Duke himself had written him. 
Mr. Watts in his statement said: 


“Many of the papers of North and South Carolina have 
apparently taken delight in censuring Mr. J. B. Duke upon 
an unfounded and untrue statement that he had become a 
citizen of Great Britain. It seems very strange to me that 
these papers would not first investigate the truthfulness of 
such slanderous rumors before publishing and giving approval 
to them. 

“Upon the dissolution of the American Tobacco Company 
by the United States courts, Mr. Duke found nothing attrac- 
tive in managing or directing any of the smaller companies 
into which the American Tobacco Company had been sub- 
divided. His whole life having been devoted to the tobacco 
business, and being recognized as a leader in this line, his 
services were eagerly sought. ‘The British-American Tobacco 
Company (whose market is the world) having made him a 
satisfactory proposition, he accepted the chairmanship of its 
board, which is equivalent to its management. ‘This requires 
Mr. Duke to spend six months in each year abroad. 

“Mr. Duke while being one of the most progressive and 
vigorous men the South has produced, is also one of the most 
modest, so never makes reply to any newspaper articles re- 
flecting upon him or his business, But I, as his friend and 
associate with him in business for over thirty-six years, feel 
that this is an injustice and should be corrected. I am there- 
fore enclosing a letter just received from him. 

“Yours very truly, 
“GrorcE W. Watts. 
“Durham, Sept. 26, 1914.” 


The letter from Mr. Duke to which he referred, 
which was written on September 22nd, is as follows: 
“Grorce W. Warts, Esquire, 

“Durham, N. C. 
‘“My Dear George: I have been told of the articles charging 
me with having become a British subject, but press of matters 


144 


WORLD-WIDE ALLIANCE 


excluded them from mind until recalled by your letter of 
the 16th, which is now before me. While these articles are 
entirely unfounded, as you and my other friends know full 
well, I did not take notice of them—because that has not been’ 
my custom. ‘The fact is that I am now a citizen of the 
United States. I do not contemplate and have never con- 
templated becoming a British subject. 

“So far as the income tax is concerned, I am always ready 
to bear my part of any taxes deemed necessary. You know 
how I have labored to build up and advance the business and 
commerce of the United States at home and abroad, and of 
my abiding faith and interest in this endeavor. ‘To mention 
no other reason, I have too much at stake in this respect and 
too much hope in the future of American business and com- 
merce to ever cease to be a citizen of the United States. ‘The 
result is that as soon as I could, after war was declared, I 
hurried home because my first interest was here, and have since 
been giving my whole time to the situation, which demands 
the best of all of us. 

“I sincerely regret missing you when you were here last 
week and shall look forward with pleasure to your promised 
visit at an early date. 

“Sincerely yours, 


*].) Be Doxes’ 


145 


CHAPTER ELEVEN 
Dissolving the Combine—Setting Up New Companies 


| Pea a single concern, even one as large as 
the British-American, must have seemed almost 
like a rest to Mr. Duke after handling so many varied 
and often conflicting interests. 

For years he had been under constant fire—inves- 
tigated, prosecuted, hounded by newspapers and poli- 
ticians, charged with maintaining a monopoly and 
finally ordered by the courts to dismember the im- 
mense combination he had brought together. Taking 
apart its numerous elements, he had reconstructed old 
companies, established new ones, and put the tobacco 
industry on a competitive basis. But this had been a 
long and painful process. Carrying out the court’s 
orders to the letter, efficiently and conscientiously, he 
always felt that the prosecution was unjust and un- 
called for, and nothing would convince him that he or 
his company had been guilty of anything that was not 
in accord with sound commercial and legal principles. 

Many able financiers and economic authorities be- 
lieved that the huge aggregations of capital which 
dominated finance and industry could not be divided 
without causing enormous losses and upsetting the 
business of the country. ‘You can’t unscramble eggs,” 
said J. Pierpont Morgan, who regarded it as almost 
a hopeless undertaking. 

The task was one of the utmost difficulty, especially 
in the case of industrial corporations such as the to- 
bacco combine. 

But when the United States Supreme Court ordered 
the American Tobacco Company dissolved, Mr. Duke 
went about ending the big corporation as energetically 
as he had in creating it—and with the same confidence. 

146 


DISSOLVING THE COMBINE 


How the properties and securities could be divided 
without injury to investors or the industry neither 
legal nor financial experts could tell. Mr. Duke, how- 
ever, was sure this could be done somehow—and he 
found the way. Here was one “trust” that was suc- 
cessfully dissolved. 

The Federal litigation against the tobacco interests 
covered a period of nearly five years. Having won the 
Northern Securities decision and its case against the 
packers, the Roosevelt administration turned its guns 
on Standard Oil and American Tobacco. 

A grand jury investigation was begun and subpcenas 
issued for officers of the American Tobacco Company, 
directing them to produce papers and documentary evi- 
dence. When these were refused the officials sum- 
moned were adjudged in contempt of court. In June, 
1906, indictments were returned against the Mac- 
Andrews and Forbes Company and the J. S. Young 
Company, charging them with combining and con- 
spiring to regulate the trade in licorice paste, largely 
used in the manufacture of tobacco. On January 10, 
1907, the case was decided against them on two counts 
and fines of $10,000 and $8,000 respectively imposed. 

Just six months later the major prosecution, 
against the parent corporation, was instituted. On 
July 10, 1907, the Department of Justice filed, in the 
United States Circuit Court in New York, a bill in 
equity against the American Tobacco Company and 
others, charging that they were maintaining a com- 
bination in restraint of trade and commerce in the 
manufacture and sale of tobacco. 

Eminent counsel were employed on both sides, and 
months devoted to the taking of testimony. Officers, 
directors, heads of departments, nearly every one con- 
cerned with the corporation, its subsidiaries and com- 


147 


JAMES B. DUKE 


petitors, independents and trust magnates alike testi- 
fied in the course of the proceedings. The printed 
record, volume after volume, covered thousands of 
pages. 

Mr. Duke was ill at his home at Eighty-second 
Street and Fifth Avenue. He was unable to appear 
in court, so his bed-chamber was turned into a court- 
room. James C. MacReynolds, of Tennessee, later 
Attorney General in President Wilson’s administra- 
tion and now a Justice of the United States Supreme 
Court, was the special representative of the Depart- 
ment of Justice. Judge Lacombe had appointed U. S. 
Commissioner James A. Shields special examiner to 
take testimony. W. W. Fuller, general counsel; 
Junius Parker, assistant general counsel; DeLancey 
Nicoll and Judge William M. Wallace represented the 
American Tobacco Company. They gathered in Mr. 
Duke’s room on February 25, 1908, and for three 
days he was testifying, under direct examination. 

Giving a detailed account of how the American To- 
bacco Company and allied corporations had been 
formed, Mr. Duke explained how and why the nu- 
merous companies and factories had been acquired, re- 
viewed the various deals and arrangements entered 
into, and gave a comprehensive history of the com- 
pany and its operations. 

He was so frank in his testimony, covering the 
ground so thoroughly, that he was not submitted to 
cross-examination by the Government’s attorney, Mr. 
MacReynolds, who contented himself with a question 
here and there to clear up some point about which he 
was uncertain. 

His principal object in going into the American 
Tobacco Company, Mr. Duke reiterated, was to get a 
better organization. W. Duke, Sons & Co. were al- 

148 


DISSOLVING THE COMBINE 


ready the leading cigarette manufacturers, turning out 
nearly half of the country’s total production, and he 
regarded the $7,500,000 they received for their prop- 
erty as only a fair value. The five firms acquired were 
sold directly to the corporation, which had not, he 
declared, raised prices to consumers or attempted to de- 
press prices of the raw product. 

Factories in other branches—plug, snuff, cheroots, 
cigars, makers of various specialties—had been ac- 
quired later because he wished his company to have a 
complete line, manufacturing every variety of tobacco. 
In some instances they bought a company to get a 
popular brand; in others to bring in some particularly 
capable man. 

Going into the various consolidations—the Continen- 
tal, American Snuff Co., Consolidated, American 
Cheroot Co., American Cigar Co.,—he told how they 
were brought about and why each was formed. To 
make a success of any particular line, he said, required 
men who knew that specialty; the business could often 
be handled better separately than together with other 
lines. That was the main reason for forming most of 
the subsidiary companies. 

“We decided we could not properly go into the 
cigar business,” he said, for example, “unless we had 
a cigar organization, people that understood that busi- 
ness.” The same thing applied to other branches. 

The prosecution made much of the fact that the 
American Tobacco Co. had bought or acquired a 
large stock interest in various concerns which were 
still being run under their own names. Mr. Duke ad- 
mitted as much, but said that old established firms like 
Blackwell’s Durham Tobacco Co., S. Anargyros, and 
Spaulding and Merrick were kept as separate organiza- 


149 


JAMES B. DUKE 


tions because they could be more efficiently conducted 
that way. 

One of the charges was that the company had bought 
up a number of firms—The Penn, Wells-Whitehead, 
R. A. Patterson Tobacco Co. and others—and kept 
secret the fact of its ownership, producing the impres- 
sion that these were independent competitors. 

“T was always opposed to that from my standpoint,” 
Mr. Duke said. “I thought it was foolishness; but to 
the man who is going to run a business I say, here, go 
ahead and run it any way you like, so you make 
profits; that is all I care. I thought it was foolish to 
run a business secretly. I would rather not do business 
than to have to do it that way.” 

He wanted the various concerns te compete with 
each other, however; the more the better, as it in- 
creased trade. “I think that one of the mistakes the 
American Tobacco Company made in the beginning 
was that we didn’t keep a separate organization for all 
of the principal businesses we bought.” 

An example of how that worked was the R. J. 
Reynolds Company, which manufactured “Prince 
Albert” smoking tobacco and various brands of plug. 
The Continental bought two-thirds of the stock, re- 
garding this as a good investment. But Mr. Duke 
would not consider the purchase unless Mr. Reynolds 
would retain a large interest, remain in charge of the 
business and run it. “Mr. R. J. Reynolds is a very 
able tobacco merchant,” he said. The Continental 
had no organization to manufacture or which under- 
stood how to make his goods. Mr. Reynolds con- 
tinued in charge, and the business increased enor- 
mously, selling within a few years several times as 
much of his product as before. 

Mr. Duke resented the charge that he had set out 

150 


DISSOLVING THE COMBINE 


to create or had created a monopoly. He did not buy 
out concerns to get rid of competition, he declared, 
but as investments. 

“We don’t gain anything by getting rid of competi- 
tion,” he said. “If we started to buy them with that 
idea they would start to build them faster than we 
could buy them. 

“We want the competitors to go on. I think we 
make more money that way than if we had a monop- 
oly. I know it is the case in the cigarette business, 
because when we had so nearly all of it, it was cut in 
half in four or five years, and as soon as we had com- 
petitors we built it up again.” 

He felt the same way about the raw product. Com- 
petition in buying leaf tobacco was better for all con- 
cerned. 

“The farmer has got to have a good price for his 
tobacco, or he won’t grow it,” he remarked. “We are 
just as much interested in the farmer as we are in 
the consumer.” 

A man could go into manufacture and make money 
as easily as he ever could, if he had a brand that 
pleased consumers, was Mr. Duke’s opinion. Going 
into business independently, he would have as good, 
probably a slightly better chance to succeed, because 
of the prejudice against big concerns. 

The Government representatives, however, held 
and produced quantities of evidence, including statis- 
tics covering almost the entire industry, designed to 
show that the American Tobacco Company had created 
a virtual monopoly in certain lines and controlled most 
of the trade, domestic and foreign. The prosecution 
contended that the Sherman law prohibited any act or 
acquisition in restraint of trade; that the acquirement 
of any competing concern was a violation of the 

151 


JAMES B. DUKE 


statute. There had been dozens of such purchases, 
many mergers and various deals of that character. 
The Government attorneys demanded not only the 
conviction of the defendants, but the appointment of 
receivers and dissolution of the company. 

On November 7, 1908, the case was decided against 
the defendants, with a few exceptions, the Imperial 
Tobacco Company, the United Cigar Company and 
one or two others. Judges Lacombe, Coxe and Noyes 
presented the majority opinion of the court, Judge 
Ward dissenting. 

“The record in this case,” said Judge Lacombe, 
“does not indicate that there has been any increase in 
the price of tobacco products to the consumer. There 
is an absence of persuasive evidence that by unfair 
competition or improper practices independent dealers 
have been dragooned into giving up their individual 
enterprises and selling out to the principal defendant. 

“During the existence of the American Tobacco 
Company new enterprises have been started, some 
with small capital, in competition with it and have 
thriven. 

“The price of leaf tobacco—the raw material— 
except for one brief period of abnormal conditions, 
has steadily increased until it has nearly doubled, while 
at the same time 150,000 additional acres have been 
devoted to tobacco crops and the consumption of the 
leaf has greatly increased. 

“Through the enterprise of defendants, and at 
large expense, new markets have been opened or de- 
veloped in India, China and elsewhere.” 

“But all this is immaterial,” the court held. The 
Sherman anti-trust act, as construed by the Supreme 
Court, prohibited every contract or combination in re- 
straint of competition. “Each one of these purchases 


152 


DISSOLVING THE COMBINE 


of existing concerns, complained of in the petition, 
was a contract and combination in restraint of com- 
petition when it was entered into, and that is sufficient 
to bring it within the ban of this drastic statute.” 

The result was a blow to the combine and endan- 
gered its existence. But the charges of unfair practices 
had not been sustained, as Mr. Duke pointed out in an 
open letter to the stockholders; the violations of law 
were largely technical, and the court had seen no neces- 
sity for the appointment of receivers. The decision 
was not satisfactory to either side, and both appealed. 

The case was twice argued in the United States Su- 
preme Court, first in January, 1910, then a year later. 
DeLancey Nicoll, of New York, and John G. John- 
son, of Philadelphia, appeared for the American To- 
bacco Company when the case was first argued. It was 
reargued in January, 1911, by Mr. Nicoll, Mr. John- 
son and Junius Parker, who continued the argument on 
behalf of the company when the Philadelphia lawyer 
was taken ill, after speaking for ten minutes, and had 
to leave the court-room. Attorney General Wicker- 
sham and Mr. MacReynolds prepared the briefs and 
argued the case for the prosecution. 

The Supreme Court, on May 29, 1911, handed 
down a sweeping decision against the defendants, hold- 
ing that the tobacco combination “in and of itself, as 
well as each and all of the elements composing it, 
whether corporate or individual, whether considered 
collectively or separately” was “in restraint of trade 
and an attempt to monopolize, and a monopolization 
within the first and second sections of the Anti-Trust 
Act.” The American Tobacco Company was ordered 
dissolved, the constituent elements to be separated so 
that competition would be restored. 

The principles of law involved had been announced 

153 


JAMES B. DUKE 


previously in the Standard Oil decision, but that was so 
largely a holding company that the court concluded 
that disintegration could be sufficiently effected by get- 
ting rid of stocks and subsidiary companies. 

In the case of the American Tobacco Company, how- 
ever, there were found to be not only holdings by cor- 
porations of stock in subsidiary companies, but it was 
declared also that the company itself had, by direct 
ownership of plants, brands and physical properties, so 
large a proportion of certain lines of the tobacco busi- 
ness, and certain of its subsidiaries, like the American 
Snuff Company, had also so large a proportion of other 
lines, that a mere disposition of stock would not be 
sufficient. . 

The Supreme Court, therefore, remanded the case 
to the Circuit Court of Appeals in New York with di- 
rections that it should “hear the parties by evidence 
or otherwise as it may deem proper, for the purpose of 
ascertaining and determining upon some plan or 
method of dissolving the combination, and of re-creat- 
ing out of the elements now composing it a new con- 
dition which shall be honestly in harmony with, and 
not repugnant to the law, but without unnecessary in- 
jury to the public or the rights of property. If no 
practicable plan was devised within six months which 
would bring about this condition, the court was autho- 
rized to appoint receivers for the properties. 

The responsibility of devising some plan by which 
the court’s decree could be made effective, and the 
interests of all concerned protected, was placed squarely 
upon the company’s officials. In this they had able 
legal advisers—Mr. Fuller, general counsel of the 
company; Mr. Parker, assistant general counsel; De- 
Lancey Nicoll, who had represented the corporation in 
the case; and Lewis Cass Ledyard, who was in close 


154 


DISSOLVING THE COMBINE 


touch with the financiers and stockholders’ committees. 
With Attorney General Wickersham and Special As- 
sistant MacReynolds, they arranged a series of con- 
ferences, during the summer and fall, with the judges 
of the Circuit Court. 

Attending every one of these conferences, Mr. Duke 
studied carefully the points discussed. The problems 
were intricate and seemed to be almost insoluble. First, 
the public interest had to be considered, and arrange- 
ments made so that no manufacturer should have a 
monopoly or preponderance of trade in any class of 
tobacco properties. Second, the rights of investors, 
holders of millions of dollars of securities which had 
varying priority, had to be considered. No one com- 
pany was to be left in a monopolistic position respecting 
the purchase, manufacture or sale of any type or grade 
of tobacco. Securities might be distributed, physical 
properties allotted, but trademarks and brands were in- 
divisible. The most popular of these, widely adver- 
tised, covering large output, were of enormous value. 
How they could be placed with separate concerns, com- 
peting in manufacture, was difficult to determine. 

He was aided by statisticians, auditors and lawyers, 
but Mr. Duke had to be relied upon to work out these 
problems, so far as the division of properties, brands, 
factories, securities and business were concerned. Be- 
fore the first conference he had prepared figures and 
charts, showing the proposed distribution of stocks, for- 
mation of new companies, conveyances to them, and 
what the result would be with respect to distribution of 
brands, competition, and leaf tobacco requirements by 
territory, type and grade. So complete, fair and com- 
prehensive was this proposal that any amendment made 
to carry out the public requirements was only trivial. 
This was, in all essentials, the plan adopted and under 


155 


JAMES B. DUKE 


. which the major portion of the tobacco industry has 
been conducted ever since. 

The American Tobacco Co. was to be continued, 
handling its full share of the business and two new 
corporations were to be organized, bearing well-known 
names—the Liggett and Myers Company and the P. 
Lorillard Company. To the former was allotted the 
following plants and their brands: Liggett and Myers, 
St. Louis; Spaulding and Merrick, Chicago; Allen and 
Ginter, Richmond (this not including the “Sweet Cap- 
oral” brand, which was manufactured partly in New 
York); the American Tobacco Company’s smoking to- 
bacco factory in Chicago and its Catlin branch in St. 
Louis; Nall and Williams, Louisville; the John Boll- 
man Co., San Francisco; the Pinkerton Co., Toledo, 
Ohio; W. R. Irby, New Orleans; two “little-cigar” 
factories in Baltimore and Philadelphia, making prin- 
cipally “Recruits,” and the Duke-Durham branch of 
the American Tobacco Co., at Durham, N. C., manu- 
facturing “Piedmont” and “American Beauty” ciga- 
rettes, and “Duke’s Mixture.” 

The Lorillard Company, in addition to the Lorillard 
properties, was allotted S. Anargyros, manufacturing 
Turkish ‘cigarettes; the Luhrman and Wilburn To- 
bacco Co.; plants in Philadelphia, Wilmington, Brook- 
lyn, Baltimore and Danville, Va., manufacturing little 
cigars, principally the brand known as “Between the 
Acts,” and the Federal Cigar Co., with its brands and 
properties. 

To handle the snuff trade, two corporations were or- 
ganized, the George W. Helme Co. and the Weyman- 
Bruton Co., the assets of the American Snuff Company 
being divided between them. The R. J. Reynolds Co., 
which has since, through its production of the “Camel” 
brand, become the largest of cigarette manufacturers, 

156 


DISSOLVING ‘THE COMBINE 


was released from any control by the American Tobacco 
Company, and so were other prominent concerns in 
which the company held considerable amounts of stock. 
The American Stogie Co. was dissolved. The licorice 
and tin-foil interests were divided between two com- 
panies. The American Tobacco Company, whose ex- 
istence was continued, disposed of its stock in the 
United Cigar Company, the British-American and 
various other corporations. 

Extensive competition was assured. Furthermore, 
the work was done so fairly and efficiently that all the 
resulting companies were able to operate successfully 
as independent concerns. 

The most difficult question, after this general plan 
was presented, was the distribution of securities. ‘The 
American Tobacco Company had outstanding over 
$100,000,000 of bonds not secured by mortgage but by 
a trust indenture which declared that about half of the 
six per cent bonds had a prior claim and approximately 
half of the four per cent bonds a secondary claim; both 
being prior in right to the six per cent preferred stock, 
then about $78,000,000, and the $40,000,000 common 
stock. How could properties of immense value which 
constituted the security for these bonds be transferred 
to independent companies? 

The bonds were not callable and did not mature for 
thirty years. The preferred stock was not callable. 
Suggestion was made that the American Tobacco Com- 
pany receive into its treasury the purchase prices of 
properties transferred to Liggett and Myers and Loril- 
lard, principally in bonds of those companies. The At- 
torney General was unwilling that this be done, con- 
ceiving that it would leave the American Company un- 
due financial power. 

Many conferences were held, Mr. Duke consulting 


157 


JAMES B. DUKE 


his legal and financial advisers, but they offered no 
solution. His family being at Newport for the sum- 
mer, Mr. Duke usually spent Saturdays and Sundays 
with them. Returning from Newport one Monday 
morning in September, he called his counsel together, 
and presented a practical plan that met all require- 
ments. This was that the Liggett and Myers and 
Lorillard companies acquire the tangible properties at 
book value, and good will at a value based on the com- 
parative earnings of the brands. The total amounted 
to $115,000,000. 

To meet the Government’s objections to receiving 
cash or holding securities to such a large amount, Mr. 
Duke proposed that the purchasing companies issue 
bonds of substantially the same classes as those of his 
company, secured by similar indentures, that these be 
exchanged for American Tobacco bonds and a certain 
proportion of preferred stocks, and that American 
bonds and stock of this amount be canceled. Thus the 
company could receive full value for the properties, 
using the major portion to retire its bonds and reduce 
its preferred stock. To induce holders of the American 
bonds to make the exchange the new companies’ bonds 
were to bear a slightly higher rate of interest. 

The two newly-organized companies were to issue 7 
per cent bonds to an amount equal to exactly half 
of the American 6 per cent bonds outstanding, 
$26,441,325; § per cent bonds for half of its four 
per cents, $25,677,050; 7 per cent preferred stock for 
one-third of the American’s preferred, $26,229,700; 
and the remainder of the purchase price, $35,651,925, 
in common stock. 

This proved acceptable to the Government’s repre- 
sentatives. ‘The question then was, how could the 

158 


% 


THE MOUNTAIN ISLAND POWER PLANT, NEAR CHARLOTTE 








DISSOLVING THE COMBINE 


holders be induced to present their stocks and bonds for 
cancellation? An offer much above the market would 
be required, as Mr. Duke realized, to attract them. 

Fortunately committees of representative bankers, 
advised by noted lawyers, had been organized to look 
after the interests of the many bond-holders and stock- 
holders. Joseph H. Choate was the adviser of one 
of these committees, Judge Morgan J. O’Brien and 
Adrian Larkin of the others. Finally it was agreed 
that the holders presenting 6 per cent American bonds 
would be paid $120 in cash for each $100 face value of 
half of their holdings and the holders of four per cents 
$96 in cash for half the bonds surrendered, provided 
they took the other half in the new bonds. 

As the market price of the “fours” was not over 
80 and the six per cents were selling around 104, this 
plan afforded considerable profits. The proposals had 
to be kept strictly confidential in order to prevent ex- 
tensive speculation. Those on the inside or any one 
having advance information could have gone into Wall 
Street, bought large blocks of the bonds, before the 
bond-holders learned of the proposition, and made 
millions in a few hours. But those who had their 
money invested in these bonds and stocks were given 
the fullest protection. Neither Mr. Duke nor his ad- 
visers took any advantage of their knowledge concern- 
ing the plans. Practically all the bond-holders ac- 
cepted the offer, and the financial problem was solved. 

Not relaxing his efforts until the various companies 
were established on a firm footing, able to compete on 
equal terms, when they were placed in the hands of 
men competent to run them Mr. Duke retired from 
active management of or connection with American 
companies and turned his attention to other enterprises, 


159 


JAMES B. DUKE 


pr incipally the British-American Tobacco Company, be- 
coming Chairman of its Board when W. R. Harris re- 
tired in 1912. 

Nothing could more thoroughly demonstrate the 
skill and foresight displayed in this allocation and read- 
justment of the tobacco interests than has the record 
of the resulting corporations. Through some sixteen 
years of independent operation, their individual busi- 
ness and earnings have continually increased, mounting 
to figures that hardly seemed possible when the “trust” 
was dissolved. Liggett and Myers, the Reynolds, 
American Tobacco and Lorillard companies, United 
Cigar and various others are among the leading Ameri- 
can corporations. 

Consumers’ tastes have changed. “Camels,” “Ches- 
terfields,” “Lucky Strikes” and other brands have sup- 
planted “Duke of Durham,” “Cameos” and “Cross 
Cuts.” A few of the old favorites, “Sweet Caporals,” 
“Richmond Straight Cuts,” “Virginia Brights” and 
“Piedmonts,” have a steady sale, but many of the 
brands popular forty years ago have vanished, and new 
ones have taken their places. Yet the structures erected 
by Mr. Duke remain, growing constantly. The organi- 
zations he set up, guided largely by men trained by 
him or brought to his association, are still the largest 
factors in the trade. 


160 


CHAPTER TWELVE 
Jobs for Men and Men for Jobs 


f ROVIDING opportunities for others is quite as im- 

‘Pp portant as getting ahead yourself, Mr. Duke 
held. Contending that only a few men can “create 
jobs,” establish enterprises that employ large numbers, 
he considered it incumbent upon them to recognize 
ability, reward faithfulness and stimulate ambition. 
Regarding this as largely responsible for his own suc- 
cess, he did not see how any large undertaking could 
succeed without it. 

His astuteness in selecting aids and associates was 
proverbial. Yet his conclusion, after long experience, 
was: “The greatest difficulty is not to find jobs for men, 
but men for jobs.?». 

Merit was his test in filling responsible positions. 
Nothing else counted. Now and then some one who 
had been successful in another line or establishment was 
employed, but promotion from within was the rule. 

“T doubt if he, personally, ever hired half a dozen 
men after he got well started,” one of his associates 
remarked. “He built up men by placing responsibility 
upon them. But they had to ‘make good.’ Not both- 
ering them with detail, he ‘let them make their own 
mistakes,’ as he expressed it. But woe to him who 
made the same mistake twice.” . 

“I never find fault with any man who does his best, 
no matter how poor that is,” he would say, recognizing 
that some have more ability than others. Employees 
were made to feel that there was no position which they 
could not attain; but they must rise by their own efforts, 
and only those who proved their competence were 
chosen for important posts. 

One official who, beginning as a clerk, had become 

161 


JAMES B. DUKE 


head of one of the largest of the Duke enterprises was 
asked how he had risen when so many who set forth 
with him had fallen by the wayside. 

“When I came into the New York headquarters, 
knowing I had to begin at the bottom, and saw a hun- 
dred clerks in that one office alone, I wondered,” he 
said, “af I had to make my way through all that force, 
where I was going to land.” But the large majority, 
he soon found, were doing only what was assigned 
them, not looking beyond the minor places they held. 
Offering to help in anything there was to do, remaining 
over hours, laboring nights and holidays without extra 
pay, he was told by fellow clerks, “You are working 
yourself to death; and it is not appreciated.” But his 
capability as well as willingness to tackle hard proposi- 
tions had been demonstrated, the office manager had 
begun to rely on him, and when a higher position was 
open, he was the one selected. 

Being in the Export Department, he was fascinated 
with its possibilities. Studying figures, reports and cor- 
respondence, talking with the representatives returning 
from China and India, he learned a lot about the for- 
eign trade. One reason so few men rose to the top, 
he discovered, was that the large majority, familiar 
enough with the branches in which they were em- 
ployed, never did get a knowledge of the business as a 
whole. That broad perspective, Mr. Duke held, was 
essential in conducting a trade where the whole world 
was open to them. 

“Merchant ability,” sought in his chiefs of corpora- 
tions and sales departments, included what he said most 
men failed to acquire—the proprietorship viewpoint. 
Another requisite was a thorough knowledge of the 
business “from the ground up.” Many of those around 
him had been “raised in tobacco.” Some, like himself, 

162 


MEN AND THEIR JOBS 


had come from farms and worked in tobacco fields. 
Others had begun in the factory, and a large proportion 
had worked in warehouses and prizeries, buying and 
handling the leaf. . 

Employees, salesmen, managers were drawn from 
various walks of life, but each one must “know his 
job.” Experts were demanded in every line. J. B. 
Cobb, who was vice president of the American Tobacco 
Co. and president of the American Cigar Co., had be- 
gun his career as a buyer and, with an initial capital of 
$500, had built up a successful trade. W. R. Harris, 
another vice president of the American Tobacco Co., 
and later Chairman of the Board of the British-Ameri- 
can, was a Welshman, taken from the auditing depart- 
ment of the Pullman Palace Car Co. to become auditor 
of the Duke corporation. The Dulas, originally from 
Lenoir, N. C., were experts in plug manufacture and 
had come to him through the Drummond Tobacco Co. 
D. C. Patterson, now president of the Imperial Tobacco 
Co. of Canada, had been Mr. Duke’s chief bookkeeper 
and aide when he was establishing his New York fac- 
tory. 

Rufus L. Patterson, president of the American Ma- 
chine and Foundry Co., had worked with Kerr, in- 
ventor of the first bag-making machine, and had him- 
self invented various devices for packing and labeling 
tobacco. W. W. Fuller, chief counsel, had been at- 
torney for W. Duke, Sons & Co. and their local adviser, 
as had his brother, Frank L. Fuller. Junius Parker, 
associate counsel, was also a North Carolina lawyer, 
who after many years in the legal department of the 
American Tobacco Co., became Chairman of the Board. 
Charles A. Penn, vice president of the American, was 
from Reidsville, N. C., coming of a family long identi- 
fied with the tobacco business. W. W. Flowers, vice 

163 


JAMES B. DUKE 


president of Liggett and Myers, entered the Duke fac- 
tory soon after his graduation from Trinity College. 
Clinton W. Toms, recently made president of that 
company, first attracted attention as superintendent 
of schools in Durham, and was later manager of the 
local plant. George G. Allen, a native of Warrenton, 
N. C., who began as a bookkeeper and accountant in 
the New York office, is now American head of the 
British-American Tobacco Co. and president of the 
Duke Endowment. These are only a few examples of 
the hundreds of men who rose to places of importance. 

“Give the other fellow a chance,” was one of Mr. 
Duke’s cardinal principles. Constantly telling his 
chiefs to “build up understudies,” to one department 
head he said, “If in five years you haven’t half a dozen 
men under you who are better than you are, you have 
fallen down on your job.” Then, after a pause, he 
added: “Because, by the time you have half a dozen 
men who are better than you are, you will be five times 
as good as you are now.” He had no patience with 
those in responsible positions who strove to keep others 
down. “A man in developing others is developing 
himself,” was his view. “It is a small man who is 
afraid to lose his job to somebody else.” Thus the 
entire organization was kept alive and growing, never 
permitted to stagnate. 

“When there’s anything big to be done, get the right 
man for the job, and leave it to him—hold him respon- 
sible,’ was his policy—and they seldom failed to 
measure up to their responsibilities. 

Having no use for loafers, either in or out of his 
employ—and this applied to all the Sons of Idleness, 
from the do-nothing rich to the ragged tramp, sponging 
on thrifty housewives—Mr. Duke remarked: “If a 

164 


MEN AND THEIR JOBS 


man who is physically able won’t work, he should be 
made to work. ‘The lazy loafers should be sent to 
jail.” 

“Sizing up” men was as natural to him as breathing, 
not only in selecting some one for an important task, 
but in hiring hands for factories, machinists, superin- 
tendents, salesmen. He made a study of men. Even 
closest associates were not free from his kindly but 
searching scrutiny. More severe regarding himself 
than with any employee, this characteristic cropped out 
at the most unexpected moments. 

Living most of his life as a bachelor, with scant 
thought of providing for a family, his approaching 
marriage necessitated a rearrangement of his personal 
affairs, and the drawing of a new will. The task was 
entrusted to his chief counsel and they spent days to- 
gether at the Duke farm in New Jersey, considering 
the matter. In such concerns he insisted on the utmost 
particularity. After stating, in general, to whom and 
how he wished his property left, he studied each para- 
graph, inquiring just what effect it would have. 

One Sunday afternoon, after a drive through the 
estate, as they were dozing away in the big cushioned 
chairs Mr. Duke roused suddenly and said: 

“Fuller, what kind of a man are you, anyhow?” 

Coming to himself with a start, the lawyer, surprised, 
said: “I don’t know just what you mean, Mr. Duke.” 

“What kind of a man do you think you are? I'd 
like to know what you think of yourself.” 

This was no idle query. Mr. Duke was in deadly 
earnest. “I don’t want you to demean yourself,” he 
explained, “or praise yourself too highly; but just to 
tell me what you think.” 

Not an easy task—for a man to paint his own por- 

165 


JAMES B. DUKE 


trait and unburden his thoughts regarding his own 
personality. But the attorney did it, carefully, 
thoughtfully, conscientiously. 

Then Mr. Duke said, “Now Ill tell you what kind 
of a man I think I am.” Setting forth clearly, one 
after the other, his characteristics, the various phases of 
his personality, he pointed out what he considered his 
good and bad points, faults and virtues. 

There was no false modesty about it, no attempt to 
gloss over faults or weaknesses. It was simply a case 
of personal appraisement—of a man standing off, look- - 
ing at his personality in a clear, cold light, sitting in 
judgment upon himself. 

Mr. Fuller recalls, even now, the impression it made 
upon him, as the most singular and illuminating in- 
stance of self-analysis in his experience. 

In 1889, when the American Tobacco Company was 
in process of formation, though the articles of agree- 
ment, charter and other documents had been drafted 
by eminent New York attorneys, Duke sent copies to 
the firm’s lawyers in North Carolina, to learn if they 
could pick any flaws in them. Mr. Fuller, who was 
local counsel for W. Duke, Sons & Co., did find a pro- 
vision that appeared more than doubtful; which, he 
believed, would tie the manufacturer up in a way which 
might embarrass and hamper him. 

The New York legal lights who had drawn the docu- 
ments scouted the idea that there was anything wrong 
with them. Mr. Seward, the leading counsel, and his 
firm were regarded as authorities on corporations. Mr. 
Markowitz, his partner, had, in fact, written what was 
then the standard if not the only comprehensive book 
on corporation law as applied to such combinations. 

But Duke was not satisfied. Sending for Fuller, he 
told him to state his objections to the attorneys. 

166 


MEN AND THEIR JOBS 


Seward, the son of William H. Seward, Secretary of 
State under President Lincoln, was president of the 
Union Club, and took Fuller there to discuss the mat- 
ter. Courtesy itself to his guest, Mr. Seward explained 
the points involved, but loftily waved aside his legal 
objections. Unconvinced, the Carolinian was at the 
same time unwilling for the agreement, involving mil- 
lions, to be upset on his lone advice. 

Finally the point was submitted to Mr. Beaman, law 
partner of Senator William M. Evarts and Joseph H. 
‘Choate, afterwards Ambassador to England, who gave 
his opinion that the Durham attorney was right. 
Though the other manufacturers insisted on including 
the provision, and for a time this threatened to upset 
the entire combination, Duke had his way, the agree- 
ment was modified, and he admitted, in after years, 
that the young attorney’s advice had “saved him a lot 
of trouble.” 

Deciding, some years later, that he would like to 
have the North Carolinian as his legal adviser, Mr. 
Duke, sending for him, set forth the large amount of 
work and responsibility involved, and then said: 

“To you think you are a big enough man for this 
job? Do you think you can swing it? 

“Consider well before you decide,” he said in 
friendly caution. “You have to go up against the big- 
gest men in your profession here. You'll be pitted at 
times against the biggest lawyers in New York and this 
country. I can’t keep anybody in that place if he 
doesn’t make good. You have a good practice, are 
doing well where you are. If-you fail here and have 
to go back, it will hurt you. Now, don’t answer hastily. 
Think the matter over, and if you think you are big 
enough to handle it, Dll take the risk and give you the 
job.” 

167 


JAMES B. DUKE 


Taking the responsibility, Mr. Fuller accepted the 
position of chief counsel of the company, moved to 
New York, and for many years was Duke’s adviser 
and aid. 

One of the first things Mr. Duke asked on his ar- 
rival was: “Do you know how to spend money?” An 
unexpected question. Never having much money to 
spend, the lawyer replied that he had devoted more 
thought to saving than spending. 

“Well, you have to spend money to make it,” Mr. 
Duke explained. “You can’t ever get anywhere by 
merely saving it. That’s all right in small things, but 
you can’t do anything on a big scale that way. You 
have to spend a lot of money here to do anything worth 
while, and the first thing to learn is how to spend it.” 

Convinced that spending millions in advertising, in- 
troducing goods and making them popular with con- 
sumers was one of the chief elements of success; that 
buying established brands, acquiring companies, im- 
proving plants and processes, building up trade in new 
regions was all money well spent, no one was more 
insistent on keeping down manufacturing expenses to a 
minimum. Spending a million dollars in advertising 
a brand, or ten millions in acquiring factories, he would 
figure down to a fraction of a cent the cost of producing 
a pack of cigarettes or a two-ounce tin of smoking to- 
bacco. And this fraction might, and sometimes did, 
cover all the advertising costs, and make the difference 
between a handsome profit and a loss. 

Another thing he insisted upon was at all times 
knowing, not guessing, the exact status of every branch 
of his business. He had installed, due to Mr. Harris, 
the most accurate and detailed system of accounting. 
Many manufacturers knew only at the end of the year 
exactly what were their gains or losses. The Duke 

168 


MEN AND THEIR JOBS 


concerns received daily reports on “Sales by Brands by 
Towns,” and could tell at any moment the sales in 
every city and section, which brands were in the ascend- 
ancy and which were declining. 

Buying out a Western factory making popular prod- 
ucts, the former owner was left in charge but the 
American accounting system was installed. In thirty 
days this disclosed that the manager’s pet brand was 
losing money while others he thought less of were 
making good profits. Refusing to believe it, he con- 
tinued spending money lavishly on his favorite. After 
three months, finally convinced by the figures, he 
turned his energies to the profitable goods. 

Accounting and reports were in such detail that each 
brand showed cost per unit, running into five decimal 
points, of every item entering into its manufacture— 
tobacco, wrapping of package, casing or sweetening 
material, shipping cases, down to the straps and nails. 
Labor in cutting tobacco, operating machines, putting 
goods in cases and handling them after they were 
packed was recorded, carried out to the last decimal, 
even if it was .00035 per thousand. Costs of any given 
article in the various factories were carefully compared, 
and manufacture eventually assigned to the plant where 
the article could be most economically produced and 
handled. 

Mass production, volume, giving the largest possible 
values for the money, were his hobbies. Forcing 
through any project decided upon, imposing his views 
upon the largest financiers as readily as on his own em- 
ployees, he would, in considering business matters, 
listen to any one who had a useful suggestion, even his 
office boy. Questioning the chef on his private car, 
talking to his chauffeur as well as his banker, he would 
get opinions from every angle. 

169 


JAMES B. DUKE 


But he “thought things out” for himself. Decision 
usually came in the privacy of his home, often late at 
night after he had retired or in the morning before 
arising. “I can think better in bed,” he remarked, re- 
garding this habit of his. Enthusiastic over projects 
that aroused his interest, he was careful not to permit 
enthusiasm to run away with his judgment. 

Quick to act in emergencies, shooting out orders like 
bullets from a gun, telling what to do and expecting 
it to be done immediately, he was never a quibbler or 
trimmer, but struck straight from the shoulder. Scorn- 
ing pretense, he held that a busy man “had no time to 
put on frills.” 

“Mr. Duke was the fairest man I’ve ever known,” 
Mr. Allen says, “as fair to the man who was absent as 
to the one who was present. He hated injustice. But 
if any one tried to take advantage of him, he never 
got asecond chance. It was the rarest thing for him to 
speak ill, even of his worst enemy. The strongest ex- 
pression I ever heard him use was to refer to some 
one who had tricked him or abused his confidence as a 
‘dinged yellow dog.’ 

“Fie had the greatest power of concentration— 
bringing out all the essentials of a subject—of any man 
I have ever known. That was what enabled him to dis- 
pose of important matters promptly and effectively. 

“One method he had of ‘educating? employees was 
to ask them questions about the business. If they didn’t 
know, he would ask again. Those who hadn’t taken 
the trouble to inform themselves were marked men. 

“In discussions he would often take the opposite 
side, to see what argument the other man would bring 
out. Open to conviction, he was quick to reverse him- 
self when he found he was wrong, saying, ‘Well, I 
think you are right about it; we will do it that way.’ 

170 


MEN AND THEIR JOBS 


“Ambition, willingness to learn, attracted his atten- 
tion, and he was especially interested in boys who, like 
himself, had come from the country. ‘The best men 
come from the back-woods churches,’ he remarked. 
‘The country boy can come to town and soon learn all 
the town boy knows, but the town boy can never get 
all that the country boy has had.’ ” 


171 


CHAPTER THIRTEEN 


Harnessing Rivers to Serve Southern Industries 


1 ese in the Carolinas, mainly along one river, the 
Catawba, is a development second in importance 
only to Muscle Shoals. Far up in Canada, on the 
Saguenay, engineers and workmen are developing a 
power that will rival Niagara, bringing into existence 
the largest enterprise in the Province of Quebec. Both 
are due to Mr. Duke, who, after making his fortune i in 
tobacco, poured millions into water-power: 

With numerous hydro-electric and six steam-electric 
plants, the Southern system has a generating capacity 
of 900,000 horsepower and distributes annually over 
one-and-a-half billion kilowatt hours of electricity 
through 3,500 miles of transmission lines. More than 
three hundred cotton mills, approximating 6,000,000 
spindles, are driven by this power—over one-half of 
all the spindles in the Carolinas, more than a third of 
the total in the South, one-sixth of all the spindles in 
America. Electricity for other industries, for lighting 
and domestic uses, is supplied to eighty cities and towns, 
illuminating streets, driving trolley cars and interurban 
trains, serving a large population. 

Built up in twenty years, most of it in the last decade, 
so far as financial backing and provision for construc- 
tion were concerned this was a one-man proposition. 

Carolinians never tire of relating how this series of 
enterprises grew out of a sore foot, a doctor’s talk and 
the dream of a young engineer. Perhaps too much has 
been attributed to the combination of circumstances, 
but that was the way it began. 

His foot paining him so he could scarcely walk, Duke 
sent for his physician. Erysipelas developed, not a 
violent case but severe enough to confine him to his 

172 


SOUTHERN WATER-POWERS 


home. As he sat there, day after day, the bandaged 
foot propped up on a pillow, the doctor was almost his 
sole companion. Unused to illness, impatient at being 
kept from his office, something was needed to engage © 
his active mind. 

Having invested in a power plant in South Carolina, 
near his former home, Dr. W. Gill Wylie, his physi- 
cian, spoke of the possibilities along the Catawba. By 
high-tension wires electricity could be transmitted long 
distances, distributed over a wide area. The young en- 
gineer in charge of construction, W. S. Lee, seemed to 
know his business and saw opportunities for a number 
of developments. 

One plant in which Duke had invested some years 
previous had proved a failure, too small to bother with. 
But a chain of them, pouring out a steady stream of 
power, was something worth considering. Oceans of 
water were going to waste while Carolina mills bought 
coal from other States to stoke their boilers. Here was 
“white coal” in abundance, enough to run them all. 

Hydro-electric generation on a large scale was a fas- 
cinating idea. Eager to know more about it, he asked 
who could tell him. “Lee,” said the doctor. Send for 
Lee, then; let him bring his plans and discuss the 
project. , 

Summoned at once, the young engineer arrived 
promptly, in response to the doctor’s telegram. Ex- 
pecting little from a single interview, he welcomed the 
opportunity. Capital was the one thing needed, and 
here was the man who could furnish it, if he “took 
the notion.” 

“The first time I ever saw Mr. Duke was at his 
home in New York,” Mr. Lee tells me. “I went there 
with Dr. Wylie, and we talked for a couple of hours. 
As I came in, Mr. Duke said: ‘Doctor, is this that fel- 


173 


JAMES B. DUKE 


low Lee who you say can do so much in power?? 
Knowing he would wish a diagram of what was pro- 
posed, I had made the preliminary plans. Examining 
them carefully, asking many questions, he inquired 
what it would cost. I told him about $8,000,000. I 
thought that was about the biggest amount I had ever 
heard of, but it seemed to attract him.” 

The Great Falls property in which he had invested 
eight or ten years previous had been almost abandoned. 
But a small plant was operated on the Raritan River 
to light his New Jersey farm, and he and Dr. Wylie 
began talking about that and how he enjoyed working 
with it. 

Water power for service in industrial areas, the dis- 
cussion soon revealed, was what interested him. Elec- 
tric transmission at high voltage being in its infancy, 
financiers had been reluctant to invest the large sums 
involved. But Duke, alive to anything which prom- 
ised encouragement to industries in the Piedmont, was 
willing to take the risk, if practical plans could be 
devised. . 

The initial scheme was to link up the Great Falls of 
the Catawba and the Mountain Island plants. Lee had 
made a map showing the transmission lines tying these 
stations together, giving continuity of service. Mr. 
Duke, he discovered, had been thinking along that line 
before. This was an opportune time to bring the mat- 
ter to his attention. 

Putting the engineer through quite a category of 
questions, he asked about the distances between plants, 
the practicability of connecting the work; the towns in 
that region, and the possibilities of industrial develop- 
ment. 

‘Branching out as far as eighteen miles from the 
Catawba plant near Rock Hill, the company whose 


174 


SOUTHERN WATER-POWERS 


project Lee was engineering was then building into 
Charlotte. There was another site down the river— 
now known as the Wateree, near Camden—which could 
be taken into the system. South Carolina capitalists 
had had Lee investigate this station, but seemed unable 
to produce the funds required. The property had been 
optioned and could be bought for about $100,000. 

Turning to Dr. Wylie, Mr. Duke said: “Doctor, if 
you will give Lee $50,000, Pll give him $50,000, and 
we’ll send him down and buy that property.” 

Coming to New York, delighted at the opportunity 
of presenting his plans, hardly hoping to accomplish 
more than the promise that they would be given con- 
sideration, Lee departed with two checks for $50,000 
each—$100,000—and an order to buy the Wateree 
site and begin work. 

Lee was only 32 years old. Mr. Duke had never 
seen him before that day. But, giving the young en- 
gineer his full backing, he left to his judgment how 
the project was to be developed. The property bought, 
additional funds were furnished from time to time as 
required, and the Wateree station, thirty miles from 
Columbia, was constructed. 

That interview, which marked Mr. Duke’s entrance 
into the field of water-power, occurred in the late au- 
tumn of 1904. Surveys were begun on a broad scale, 
other properties acquired, and a few months later, in 
June, 1905, the Southern Power Company was organ- 
ized. 

Plunging into water-power development heart and 
soul, Mr. Duke was studying every phase of it. All 
the major plans were discussed with him, and at times 
he would insist on going into the utmost possibilities 
of whatever matter was under consideration. Dams, 
which they were striving to make better and stronger 


175 


JAMES B. DUKE 


than was customary, excited his especial interest. Study- 
ing the entire subject at his direction, the engineers 
made a comprehensive report on the evolution of dams 
—the earliest and how they had been built, all the later 
types devised, down to the most recent designs which 
experience and scientific knowledge had proved suc- 
cessful. | 

Considering various methods that might be used, 
Mr. Duke often suggested things that had been tried 
out, some of them long ago. Not in any sense a trained 
engineer, his mind would follow automatically a dis- 
cussion of engineering problems. When he said em- 
phatically, “that can’t be done,” his engineers would 
usually find it was impracticable. 

“T know that in many cases he never had studied or 
heard of the things brought up,” said Mr. Lee; “I 
could tell that from his manner of approach. But 
readily grasping the idea, his mind passed on to the 
next step.” 

Disliking “conferences” and talk that “didn’t get 
anywhere,” Duke would say impatiently, “Cut out the 
town meetings,” when there seemed to be too much 
talk and not enough action. Many important instruc- 
tions were given verbally. Deciding matters almost 
immediately, when the facts were before him, he would 
direct the man in charge to “Do it, and do it quick.” 

Plants that cost millions were authorized without the 
scratch of a pen. If the plans were satisfactory he 
would say, “All right, go ahead.” His “O.K.” was 
all the authority needed. It was as good as a check 
for the funds required. 

“T do not recall that there were ever any formal or 
written instructions given me during my many years 
of association with Mr. Duke,” Mr. Lee remarked. 
“Tt was his policy to designate one man to begin and 

176 


SOUTHERN WATER-POWERS 


complete a thing rather than start a debating society 
or hold a town meeting over it. 

“Efe had a wonderful power of making decisions. 
Sometimes these seemed to be almost off-hand, with 
hardly any consideration. But they were as accurate 
as they were swift. Generally he had gone into the 
matter thoroughly, had the points fixed in his mind 
and was sure of his ground. He merely thought 
faster, more accurately, and grasped the points of a 
situation more quickly than most men. And, once he 
had decided, he acted promptly.” ‘Action was his 
middle name,” as another friend expressed it. 

A sharp questioner, probing direct for the essentials 
of a subject, Mr. Duke was never a ready talker. 
While discussing business matters he had a habit, as 
he sat at desk or table, of tearing paper into little 
pieces. This, somehow, seemed to help the process of 
thought with him. Sometimes the floor was littered 
with the bits of paper. But when, arising, the litter 
was brushed aside, he was ready for action. 

“If you were to ask me,” said Mr. Lee, “what built 
the Southern Power system, I would say: First, Mr. 
Duke’s careful analysis in detail of any matter brought 
before him; second, his quick and positive decision; 
third, his intuitive knowledge and habit of studying the 
various phases of anything in which he was interested.” 

Use of electricity for power purposes was then in 
its early stages, transmission over any considerable dis- 
tance being largely experimental. There was no as- 
surance that, if the power were developed on a huge 
scale, users could be found for it, or that this power 
could be successfully transmitted over a sufficiently 
large territory to assure an ample market. 

But having broad visions of what could be done in 
the South, Duke was convinced that the extensive tex- 


177 


JAMES B. DUKE 


tile development in the Fall River section of Massa- 
chusetts could be and would be duplicated in the Caro- 
linas, if low-priced power was available. And he pro- 
ceeded to provide it. 

The Southern Power Company, when organized in 
1905, absorbed the Catawba Power Company with its 
10,000-horsepower plant at Indian Head Shoals. Con- 
struction of a large hydro-electric plant at Great Falls, 
S. C., was begun immediately, and before that was fin- 
ished work was under way on a plant of similar capac- 
ity at Rocky Creek. The former was put into com- 
mission in April, 1907, the latter in 1901. Next was 
the plant at Ninety-Nine Islands, on the Broad River, 
completed in May, 1910; followed by Lookout Shoals 
in North Carolina, Fishing Creek in South Carolina, 
completed in 1915 and 1916, and the Bridgewater de- 
velopment in North Carolina, finished in 1919, the 
Wateree plant near Camden, S. C., also going into op- 
eration that year. Then came two more large plants, 
the Dearborn, Great Falls, S. C., and the Mountain 
Island plant, twelve miles south of Charlotte, put in 
commission in 1923. 

A 45,000-horsepower station was completed at Rho- 
dhiss early in 1925, as was the new Catawba plant with 
a capacity of 80,000 horsepower. Meanwhile construc- 
tion was begun on another hydro-electric of 60,000 
horsepower at Rocky Creek and also upon an additional 
steam-electric plant at Salisbury, designed for a gen- 
erating capacity of 100,000 horsepower. 

Industries were few and scattered when these devel- 
opments were begun, the importance and value of elec- 
tric power were not fully appreciated, and for a long 
while there was a surplus of power. During recent 
yeats the requirements have exceeded the available 

178 


SOUTHERN WATER-POWERS 


supply and new plants have had to be erected con- 
tinually to meet the demand. 

From one small power-house developing less than 
10,000 horsepower, and forty miles of transmission 
lines, the Southern Power system has grown until to-day 
its plants generate 900,000 horsepower, and its trans- 
mission system embraces 3,500 miles of lines. At the 
beginning serving only thirteen cotton mills with fewer 
than 150,000 spindles, to-day this power drives more 
than three hundred cotton mills and numerous other 
factories. 

Interested in cotton as well as tobacco manufacture 
the Dukes owned several large mills and invested in 
others, Benjamin N., as well as Brodie Duke, being 
particularly interested in this field. In addition to his 
power and other enterprises, “J. B.” built the most im- 
portant interurban electric railway in the Carolinas, the 
Piedmont and Northern, running from Charlotte to 
Greenville, S. C., his companies also operating street 
railways in a number of towns. 

Electric service available at low cost for manufactur- 
ing establishments, stores and homes has wrought a 
revolution in that territory. Wherever the high-tension 
lines have gone factories have arisen, villages expanded 
into towns and towns into cities, bringing prosperity and 
the creation of new pay-rolls, giving work and wages 
to thousands. Farmers have profited through the 
wider markets for foodstuffs and other agricultural 
products, and the entire region has shared in the benefits. 

The pioneer in hydro-electric development on a large 
scale in that region, the Southern Power Company sup- 
plies several times as much current to industries as all 
other public utilities combined. Its annual output of 
electricity is equivalent to the energy produced from 


179 


JAMES B. DUKE 


more than two million tons of coal. Cotton manufac- 
turers figure that the use of electric power instead of 
burning coal in their individual plants means a saving 
of more than $5,000,000 a year. Money invested in 
boilers and engines is “dead” capital, in so far as pro- 
duction is concerned, while the factory using electric 
power puts practically its entire capital into productive 
equipment, the expense of motors and accessories being 
but a fraction of the cost of a steam plant. 

Everything considered, not less than $9 and prob- 
ably $10, authorities estimate, is added to the general 
wealth by every dollar invested in water-power. In- 
dustries new or enlarged account for most of this, but 
there is also an immense incidental investment, in hous- 
ing, stores and other features of an industrial com- 
munity. Thus the advantages brought through Mr. 
Duke’s electric enterprises have aggregated perhaps ten 
times the amount of capital put into them—and he in- 
vested many millions. 

In Mr. Duke’s boyhood North Carolina was one of 
the poorest parts of the country. Property had been 
destroyed, wealth swept away by war. Reconstruction 
was almost as destructive. 

Not succeeding in enlisting Northern capital or ob- 
taining outside aid, the “Tar Heels” began developing 
their own resources. Small tobacco factories and cot- 
ton mills were established with the few dollars that 
could be scraped together, profits were reinvested in 
the plants, and additional capital was mainly from local 
savings. So the people of the State, on the whole, own 
its industries. Growing into important establishments, 
some of these factories, like the Duke and Bull Dur- 
ham plants, the R. J. Reynolds Company at Winston, 
the Cannon mills, near Concord, became the largest of 
their kind. 


180 





NINETY-NINE ISLANDS STATION, ON BROAD RIVER 





RHODHISS POWER STATION AND COTTON MILLS 





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SOUTHERN WATER-POWERS 


Leading the South in industries, both in value of 
product and numbers employed, the capital invested in 
North Carolina now totals close to a billion dollars, as 
is shown by this official report: 


Capital Value of 

Number Invested Product 
Cotton mills ............. 386 $168,292,000 $252,078,000 
Cardaremmilig@e 42-12 bese 5 1,035,000 1,728,000 
Silk mills. 2. cea Neate sd trea 2 3,000,000 25350,000 
Woolent mulls o6) 5.206.260 6 5 1,890,000 3723,000 
Knstermpemilinn 2% uv. - omy 131 33,994,000 29,058,702 
Furniture factories ........- 107 15,000,000 50,000,000 
‘Tobaeco factories ......... 17 50,198,170 251,555,000 
Tire and rubber manufacturers 43 1,600,000 3500,000 
Miscellaneous manufacturers 20.50. ete eee 357,918,298 
TEE LON sia lene ce aphles A ae dear one Tae $951,911,000 


Producing one-fourth of the tobacco manufactured 
in the United States, its tobacco manufacturers pay to 
the Federal Government annually some $118,000,000 
or more in internal revenue taxes, New York, next in 
rank, paying less than half that sum. 

Excelled i in cotton manufacture only by Massachu- 
setts, North Carolina has a larger number of cotton 
mills than that stronghold of the textile industry. 
Cotton manufactures have increased ten-fold in value, 
reaching more than $250,000,000 annually; the num- 
ber of employees has increased 123 per cent, and the 
capital employed 712 per cent. Here are the largest 
hosiery and towel mills, the largest denim and damask 
factories in America. 

Furniture making is another thriving industry, High 
Point being the center of furniture manufacture in the 
South as Grand Rapids is in the North. 

Agriculture has kept pace with manufacturing. Farm 
values more than doubled in the decade covered by the 

181 


JAMES B. DUKE 


last Federal census, increasing from $537,716,210 to 
more than $1,250,000,000, and the State has advanced 
in twenty years from twenty-fourth to fourth place in 
value of crops. 

Making a compilation of comparative increase of 
wealth in twenty-three States, the U. S. Department 
of Commerce discovered that North Carolina showed 
the largest proportionate advance, 175.7 per cent. In 
road improvement, schools and colleges the “Tar 
Heels” have set the pace for their neighbors. Smooth, 
well-graded highways stretch from the mountains to 
the sea. More than a hundred million dollars have 
been expended in roads, and a system constructed that 
compares well with any in existence. 

Once near the bottom of the list, having a higher 
percentage of illiteracy than any State save one, North 
Carolina now stands ninth in the Union in school at- 
tendance, and first among the Southern States. Inaugu- 
rated some thirty years ago, the educational revival has 
resulted in establishing a model school system, with 
over 800,000 pupils enrolled. Building for years “a 
school-house a day,” there are now nearly seven hun- 
dred high schools, in addition to the thousands of com- 
mon schools. 

This has been accomplished, in the main, by Caro- 
linians themselves, by men “born and raised” there. 
Almost the entire population being of native stock, 
principally descendants of English and Scotch-Irish set- 
tlers, here is the smallest proportion of foreigners in 
any part of the United States, the population of 2,- 
559,123 including, according to the last census, only 
7,272 foreign born, three-tenths of one per cent. 

Immigration has fertilized the majority of our com- 
monwealths, but this one’s growth has been due almost 
entirely to natural increase, its birth rate being greater 

182 


SOUTHERN WATER-POWERS 


than that shown by any other State from which the 
Census Bureau collects data, 30.2 per 1,000 population. 

What has been responsible for this notable improve- 
ment in what was long regarded as a backward State? 
Many things have contributed to it. Progressive lead- 
ers in town and country, in business establishments, 
schools, colleges and the professions have done their 
part. Pulpit and press preached the gospel of good 
roads, better schools and larger industries. Factories, 
stores and farms, with their wages, yields and profits, 
provided the means. Industrial and educational de- 
velopment moved hand in hand. 

The tobacco and cotton industries have been perhaps 
the most important factors, and their growth has been 
immensely stimulated by the supply of electricity. 
“Cheap power, ample resources and an abundance of 
enterprise and muscular energy are the facts that are 
rejuvenating the South, bringing it back to the place 
of dominance which it once occupied,” said the Amer- 
ican Exchange-Pacific Bank, in summing up a recent 
survey. And that has been especially the case in this 
part of the South. 

Electricity of more than a million horse-power is 
now generated and distributed by hydro-electric plants 
in the Carolinas, equaling the combined power of this 
character generated for commercial and community use 
in the other Southeastern States. Ninety per cent of 
the cotton mills and tobacco factories, fifty per cent of 
the furniture factories and knitting mills are electri- 
cally driven. 

Due to many different elements, no single factor has 
contributed more to the growth of the Carolinas than 
these water-power developments and resulting enter- 
prises. 

Large as were Mr. Duke’s material contributions, his 

183 


JAMES B. DUKE 


real passion, Governor Angus W. McLean of North 
Carolina declared, was “based on spiritual values, as 
expressed in manhood and womanhood.” Bringing 
back his riches to his mother State, he “laid them in her 
lap that they should be used to bless and benefit her 
children and children’s children in seeking the enduring 
things of life.” 

“The material benefits of Mr. Duke’s generosity are 
already apparent,” the Governor pointed out, “but no 
one can visualize the benefits which he has bestowed 
on future generations any more than one can see in 
the tiny acorn the spreading oak, except through the 
eyes of faith and anticipation. The division of his 
munificent bequests—part for hospital work, the relief 
of suffering, and part for education, the growth of the 
soul, shows most eloquently what interests lay nearest 
his heart in the last years of his life. For the next 
hundred years—even longer—there will not be a citi- 
zen of the State, young or old, who will not feel the 
benign influence of his contribution to the great work 
of making North Carolina a better State in which to 
live.” 


184 


CHAPTER FOURTEEN 
Taming the Waters of the Saguenay 


w the swift fall of the Saguenay, as it flows from 
| Lake St. John, in Upper Quebec, Mr. Duke found 
the means of generating an almost unlimited supply of 
electricity. There in the Canadian wilds, a hundred 
miles north of the City of Quebec, is proceeding stead- 
ily, step by step, one of the most extensive power de- 
velopments on the continent. 

The largest single installation ever undertaken is 
that at Isle Maligne, which will produce 540,000 horse- 
power. The ten units at Chute a Caron, when the 
dam and power house there are completed, will gen- 
erate 800,000 horsepower. At that point is being estab- 
lished the largest of aluminum plants. The Premier 
of Quebec announced, in June, 1925, four months be- 
fore Mr. Duke died, that the plans provided for the 
greatest industrial establishment ever projected in the 
Province, calling for the expenditure of $75,000,000 
to $100,000,000 in development and construction. 

Some 8,000 workmen will be employed, when the 
aluminum plant is in full operation. To house them 
and their families a model town is being laid out, pro- 
viding for hundreds of cottages, schools, churches, 
stores and all the modern conveniences. With other 
enterprises which the power plants will attract, Cana- 
dians are predicting that in a few years there will grow 
up a city of 35,000 to 40,000 population in what not 
long ago was a wilderness. 

For generations men had looked upon these rapids, 
recognizing their boundless potentialities, but realizing 
also the almost insuperable difficulties to be overcome 
before this tremendous force could be utilized. En- 
gineers did not, of course, take any stock in the local 

185 


JAMES B. DUKE 


tradition, handed down from the time of the early 
explorers, that the “dark, mysterious river,” as the 
Indians called it, could never be brought under human 
control. From an engineering standpoint, with the ad- 
vance of hydro-electric science, this was regarded as 
feasible. A huge project, requiring not only immense 
capital but the “nerve” to put through an untried en- 
terprise and the business ability to make the investment 
- yield returns, no man or corporation had been found 
to attempt the venture until Mr. Duke entered upon 
the undertaking, with all the energy and resources at 
his command. 

Organizing the Quebec Development Co., he began 
acquiring properties in 1913, but owing to conditions, 
the active work of construction did not begin until after 
the war. The physical task, impounding the waters of 
a vast lake, changing channels, constructing dams, erect- 
ing power-houses, building railroads and bridges, plant- 
ing a city in the wilderness, was difficult enough. But 
a more puzzling problem to financiers was how the 
power could be utilized profitably. 

“T am not worried about disposing of the power,” 
Mr. Duke said. “It is only a question of patience and 
a little time.” 

Confident that cheap electric energy, wherever de- 
veloped, would attract users, he did not wait for cus- 
tomers but went after them, investigating what indus- 
tries were the largest users of electric power, which 
were best suited to conditions there. If they could not 
be attracted, he would establish similar ones of his 
own. 

Joining forces with Sir William Price, of Montreal, 
and associates, he organized the Duke-Price Power 
Company, and entered upon the development at Isle 
Maligne. Price Brothers and Co. already had a paper 

186 





i, ok ae 


ISLE MALIGNE, THE 540,000-HORSEPOWER STATION ON THE SAGUENAY 





TAMING THE SAGUENAY 


mill at Kenogami, near by, and he contracted with them 
for a considerable amount of power. Acquiring from 
the Price Brothers Company the site at Chute a Caron, 
farther down the river, he formed an alliance with the 
Aluminum Company of America, the largest single 
users of hydro-electric power, resulting in construction 
of the big aluminum plant. When he became a direc- 
tor of the Aluminum Company, in which Mr. Andrew 
Mellon and his brother are largely interested, the Sec- 
retary of the Treasury was quoted as saying that he 
considered Mr. Duke’s judgment, experience and vision 
as worth more to them than the property they had 
acquired. Arthur V. Davis, the president, and other 
officials of the Aluminum Company became prominent 
factors in this Canadian enterprise. 

How Mr. Duke happened to invest huge sums in 
Canada is worth relating. For, in a way, it did simply 
“happen.” Canada was not his destination. He was 
headed for the Pacific Coast when a friend induced 
him to go to Quebec and take a look at the Saguenay. 
The tickets for Seattle were canceled. Quebec ac- 
quired its greatest asset, and Seattle will never know 
what it missed. 

In connection with water-power Mr. Duke had been 
greatly interested in the electro-chemical industry, es- 
pecially the fixation of nitrogen and manufacture of 
fertilizers. On various trips to Europe he had secured 
certain rights and processes for the fixation of nitrogen 
from the air. Dr. Eyde, of Norway, originator of the 
Birkland-Eyde process, a leading authority on the sub- 
ject, visited America in 1912, and Mr. Duke, W. S. 
Lee, of the Scuthern Power Company, and others had 
several conferences with him. 

Mr. Duke finally decided to make a trip out to the 
West Coast, to inspect water powers with a view to 

187 






JAMES B. DUKE a 


finding some which could be economically developed 
for the manufacture of nitrogenous compounds, Leay- 
ing New York in September, 1912, the party of six or 
eight proceeded to Canada, visiting Massena Springs, — 
looking over the Lachine Falls and the St. Lawrence ~ 4 
River, and going to Ottawa. 

There they were met by Thomas L. Wilson, widely - 
known as “Carbide” Wilson, because of his cothusiaaay t 
over power development for electro-chemical use. a 
fact, he had a small plant in Canada used as a Shoal 
tory, and had done some work on the Saguenay and — 
Shipshaw rivers, near Chicoutimi. He and his asso- — 
ciates were insistent that Mr. Duke and his party © 
change their itinerary, and make a trip to that region. — 

So the party concluded to go to Chicoutimi, and from 
there visited and inspected the falls and rapids of the — 
Saguenay, seven to ten miles up the river. With a — 
drainage area of 30,000 square miles, the normal flow — 
of this mighty stream is equivalent to flood conditions — 
on the Carolina rivers, rushing down the rapids at the — 
rate of 35,000 cubic feet per second. Here was all the 
power a man could ask. : 

“We went in a duck boat up to the end of tidewater, — 
landed and then walked up trails on the banks of the — 
river for possibly two miles,” Mr. Lee relates. “This — 
large river breaks through regular gorges at that — 
point and was a very impressive scene. As we passed 
these various falls and walked around among the 
bushes, Mr. Duke stopped and said: ‘Lee, I’m going to 
buy this.? He had been there less than thirty minutes, 
and that was his first sight of the place. But his mind 
was made up. He decided to go into it there and 
then.” 

This particular fall forms a part of the rapids of 
the Saguenay, extending from Chicoutimi to Lake St. 

188 


ep eRe oe ase Se ee 








FH. COTHRAN. GEORGE CLAPP A.K. LOWERY, J.B. DUKE. RB MELLON © LA 
- ' ee 

i ss 

ce 

a J 


if 


(FICIALS OF THE POWER AND ALUMINUM COMPANIES WITH MR. DUKE ON HIS LAST VISIT TO CANADA, JI 





TAMING THE SAGUENAY, 


John, a distance of about thirty-seven miles, in which 
the river drops 318 feet. The lower part was owned 
by Mr, Wilson and his associates, and was acquired by 
Mr. Duke from them. The remaining portion of the 
falls, extending from Chute a Caron, was bought from 
J. B. Haggin and others associated with him. Mr. 
Hagegin at that time was 96 years of age and his son 
76. Mr. Duke referred to his son as “the boy.” 

Nearly two years were consumed in acquiring these 
properties. After that three or four years were spent 
in buying the various farms and power rights, changing 
roads, building bridges and moving churches, for a 
large area had to be cleared. More than two thousand 
farms were purchased, in whole or in part, to complete 
the necessary water and flowage rights of the Saguenay 
project. These were in a French-speaking region and 
belonged to the “habitants.” Dealing with these 
French-Canadians, getting them to sell the farms and 
houses which their people had occupied for genera- 
tions, Was no easy matter. 

In the meantime surveys were made and plans per- 
fected for development of the entire falls on the most 
efficient and comprehensive basis. In addition to se- 
curing water rights from the Wilson, Haggin and Price 
interests, the purchase of land and sweeping changes in 
the community necessitated securing from the Provin- 
cial Government the right to impound Lake St. John, 
above the river. This northern lake covers an area of 
nearly four hundred square miles and is twenty-five 
to thirty miles across at certain points. 

The Saguenay, which is a tributary of the St. Law- 
rence, flows out of the lake by two channels, known 
as the Grand and the Little Discharge. Nine miles 
below these channels unite and thirteen miles further 
downstream reach tidewater. 


189 


JAMES B. DUKE 


Complete utilization of the river, which has a fall 
of more than 300 feet from the lake to tidewater, re- 
quires two developments in order to use all the fall 
economically. One of these is located at Isle Maligne, 
seven miles from Chicoutimi, and the other at Chute a 
Caron, twenty miles further down the stream. 

Isle Maligne, the last of the numerous islands in the 
Grand Discharge, is a mile and a quarter long. This 
divides the stream bed into two rocky gorges through 
which the water rushes with tremendous force, and 
here it was decided to locate the power house. 

Unusual problems were to be solved. In winter the 
ice is two to three feet thick on the lake, and the Little 
Discharge is practically dry. Some means had to be 
devised to draw water into the turbines directly from 
the lake’s natural storage. The arrangement finally 
adopted draws the water from an average of twenty 
feet below the lake’s surface, insuring an uninterrupted 
flow. 

The power house was located at the downstream end 
of the island, and the right channel closed at its up- 
stream end by a spillway. Other spillways were pro- 
vided, and an earth dam erected in a ravine on Alma 
Island, between the two channels, so as to extend the 
lake to the intake of the power house. More than half 
a million cubic yards of masonry were used in con- 
struction. 

Isle Maligne was inaccessible, so far as freight trans- 
portation was concerned. Hebertville, the nearest sta- 
tion on the Canadian National Railway, was fourteen 
miles away. There was a road running from St. Jo- 
seph d’Alma, the nearest settlement, but the grades 
were steep, a covered bridge was the only crossing over 
the Grand Discharge, and the highway was impracti- 
cable for heavy traffic. 


190 


TAMING THE SAGUENAY, 


A railroad had to be provided before work on the 
power station could be started. Construction of a line 
eleven miles in length from Isle Maligne to Hebert- 
ville was begun. Camps were set up, scores of houses 
erected for the workmen, and hundreds were employed 
in grading, laying cross-ties and rails, and building the 
three steel bridges. Heavy winters had to be faced, 
not a few handicaps overcome, but the railway was 
built in record time. Authority to begin construction 
on the general project was given in December, 1922. 
The railroad was completed to the terminal, at the 
Grand Discharge, by the middle of the following Au- 
gust. Three months later the cantilever bridge across 
the river was completed and trains were running into 
Isle Maligne. 

This was but one part of a work that employed 
thousands of men and involved some of the most ex- 
tensive construction of the kind ever undertaken. Con- 
trolling the river is the key to the entire project. 
Spring floods if not held back, would come pouring 
down, sweeping away everything in their path. A 
year’s construction work might be wiped out in a day. 
By impounding Lake St. John and damming the stream 
at Isle Maligne, the entire flow is controlled and could 
be practically stopped for a few days while foundations 
were being laid or some big piece of construction put 
into place. 

At Chute a Caron the fall is nearly twice as great 
as at Isle Maligne, with almost double the power, but 
the upper works had to be virtually completed before 
construction could be begun on the lower development. 
The larger work, which will require, it is estimated, 
some four years for completion, is now under way. In 
this the aluminum interests are the leading factors. 

A new corporation, the Alcoa Power Company Lim- 


191 


JAMES B. DUKE 


ited, has been organized by the Aluminum Company 
of Canada, the Canadian subsidiary of the American 
corporation, for the undertaking. Below the power 
site at Chute a Caron is coming into existence the new 
city of Arvida, named for Arthur V. Davis, president 
of the Aluminum Company, which will house the staff, 
the army of workmen who will be employed and their 
families. Town planning experts and landscape archi- 
tects have laid out the area on the most advanced lines 
with provision for thousands of residences, business 
houses, schools, a cathedral, hospitals, and even a coun- 
try club and golf course. 

This model city is being built, section by section, as 
the growth of population requires, and the population 
will increase as the aluminum factory expands. The 
initial unit of the plant is already in operation, a hun- 
dred thousand horsepower being transmitted from Isle 
Maligne. Other units will be completed as the demand 
grows. The turbines on the Saguenay will furnish all 
the power required for the aluminum factory, as well 
as for other industries that may be established. In ad- 
dition, when the Chute 4 Caron plant is completed, 
there will probably be a considerable surplus of power 
available for transmission to Quebec and other parts of 
the province, though in time the industries attracted to 
this region may eventually require all the 1,300,000 
to 1,400,000 horsepower. 

Various factors have entered into this great develop- 
ment, but it was made possible, initiated and carried 
forward by Mr. Duke, and stands as a monument to 
his courage, vision and energy. ‘This extensive en- 
gineering enterprise, one of the largest of the kind on 
record, has been carried out by the men he selected, 
W. S. Lee, who from the beginning was his chief en- 
gineer in his Southern power developments, and F. H. 

192 





45,000-HORSEPOWER HYDRO-TURBINE, ISLE MALIGNE, CANADA 





TAMING THE SAGUENAY, 


Cothran, who has been in charge of the Canadian con- 
struction; by the Mellons, Mr. Davis, and the Alumi- 
num interests he enlisted. Mr. Cothran, with Mr. Lee 
as consulting engineer, has directed the building of the 
dams, power-houses, railways and bridges. So the un- 
tamable Saguenay has been harnessed, and a new indus- 
trial empire added to Canada. 

Remarking upon the magnitude of the Saguenay 
River project and the financial resources required to 
swing such a proposition, the New York Herald, in a 
striking editorial, said: 

“The vast North American waterpowers that are 
spilled unused into the lakes, bays and seas are an eco- 
nomic waste that can be expressed only in hundreds of 
millions of dollars a year lost to man. This natural 
and inexhaustible power of the streams and rivers can 
save the coal supplies and roads that are now in dark- 
ness, and add to the wealth of the nation and the world 
in an unceasing volume. Public sentiment and business 
vision have come to a realization of the possibilities of 
this problem only recently, so that the work of water 
power development is merely at its beginning. 

“All over the country and Canada, wherever the 
genius and daring of men like Mr. Duke can turn 
wasted water into heat, light and power that can be ap- 
plied to productive industry and to improved living 
conditions, there are perpetual benefits to be conferred 
on nations and people. Coal burns away and the earth 
becomes empty of it. As the forests make room for 
agriculture to provide food for increasing populations 
the timber supply is diminished. But the springs and 
brooks that provide the power of the great waterfalls 
go on forever.” 


193 


CHAPTER FIFTEEN 
Creating a Wonderland—Homes in City and Country 


Low green fields, streams, flowers, fountains, 
horses and cattle, never enjoying life in the city 
as much as in the country, Mr. Duke in his homes and 
farm gratified his taste for beauty in nature and art. 

For five years after coming to New York in the 
early eighties he had lived in hall bed-rooms, eaten in 
restaurants and hardly considered his personal com- 
fort. Not until the close of 1889, when the cigarette 
manufacturers had been brought together and his trade 
firmly established, did he really give any attention to 
personal enjoyment. 

Fond of horses, he first bought a team—two spank- 
ing fine roadsters and a brougham. To drive them 
Alex Herndon, a tall, yellow negro, was taken from 
the shipping room and installed on the box. Mr. Duke 
cared nothing for display, in the office or on the road. 
But Alex had no such modest ideas. He was no mere 
driver, but a “coachman,” and had to be appareled as 
became his rank. Wearing a coachman’s hat, with a 
cockade on the side, and a moonstone pin the size of a 
small toadstool in his scarf, “Big Alex” was a conspicu- 
ous figure around the streets. “I believe I spend more 
time keeping up with Alex,” Mr. Duke said, “than he 
does in driving the team.” 

Desiring a home of his own, something he had not 
yet possessed, he bought, in July, 1893, the John 
Veghte place, a farm of 327 acres in New Jersey, near 
Somerville. He devoted his attention to farming and 
dairying, and at one time owned a herd of 250 regis- 
tered Guernseys. Interested in fine horses, in a few 
years stables and a half-mile trotting course were con- 


194 


CREATING A WONDERLAND 


structed on the estate, as well as a model dairy, stocked 
with the best breeds of cattle for butter and cream. 

Adding to his holdings from time to time, Mr. Duke 
finally owned twenty-two hundred acres, and made this 
the “show place” of New Jersey, one of the finest 
estates in America. Few areas were less adapted to 
artistic conversion. The land was flat and uninterest- 
ing, the soil poor, composed principally of shale and 
clay. But the difficulties seemed only to add to his 
zest in the transformation. 

“Duke Farms” was his pride, developing it his fa- 
vorite diversion. The property was transformed into a 
veritable fairyland. Landscape gardeners, architects, 
horticulturists, sculptors, workers in stone and stained 
glass were brought from Europe. Armies of workmen 
were employed. For years the place was a litter of 
steam shovels, donkey engines, pumping stations, work- 
houses and bagged nursery plants. 

Hills were piled up, valleys and forests created, and 
a chain of lakes excavated covering seventy-five acres. 
Transplanting hundreds of trees, placing miles of 
shrubbery was as much in the day’s work as grading 
and surfacing the winding roads which threaded the 
estate. Native trees were planted by hundreds and 
for quite a period 100,000 trees and plants were im- 
ported annually from abroad. 

Water was one of Mr. Duke’s passions. He never 
tired of watching its flow or seeing crystal columns and 
misty spray thrown high into the air. Streams were 
turned into new channels, flowing through grassy banks, 
lined with shrubs and flowers. Attractive stone bridges 
were built, spanning river and brooks with graceful 
arches. 

Fountains were placed on every hand, thirty-five or 
more of them, rivaling in beauty if not in numbers 


195 


JAMES B. DUKE 


those of Fontainebleau and Versailles. One was an 
exact copy of the fountain in the Place de la Concorde, 
in Paris. Water to supply lakes and fountains was 
drawn from the Raritan River, filtered, pumped into a 
large reservoir, and after being distributed to the lakes 
was returned, by an ingenious system, to the power 
plant. 

Flowers delighted him and there were acres of them 
at Duke Farms—elaborate formal gardens, reminiscent 
of Italy; masses of the old-fashioned blossoms he had 
been fond of since childhood. His greenhouses not 
only supplied his estate and town-house with flowers 
and plants, but the gardeners raised, under glass, 
oranges and melons which were served, fresh from 
trees and vines, at his table. Rare plants, as well as 
the more familiar species, interested Mr. Duke, who 
took a particular pride in his orchids, buying and grow- 
ing unusual specimens and new varieties. His orchids 
and roses were features of numerous exhibitions and 
won prizes time and again at the national flower shows. 

Sculpture attracted him, and statuary was placed 
at various points around the grounds. Studying effects, 
sites and vistas, he spent hours in deciding where these 
should be placed. In marble and bronze, most of them 
were by foreign artists, some productions of unusual 
merit. 

An ardent admirer of McKinley, Mr. Duke ordered 
a large statue of the martyred President made in Italy. 
In bronze, three times life-size, this was cast in Flor- 
ence, brought to America and set up on the estate. 
Thousands of dollars were spent and the location 
changed time and again before Mr. Duke found a site 
that suited him, with a fitting approach. 

Millions were lavished on construction. The resi- 
dence, originally the Veghte home, was enlarged to a 

196 





AGSUa’ MAN NI GULVYAIUO GNVTHUAGNOM AHL ( SNUVA aMOd,, O ASdWITS V 


ner rm 





CREATING A WONDERLAND 


pretentious structure of some fifty rooms, with a palm 
room and three conservatories. Later a new mansion 
was erected, one of the largest and most elaborate 
dwellings in that section. 

Ranges of greenhouses were constructed, covered 
with 110,000 square feet of glass. In them was an 
almost endless variety of rare plants. One house was 
filled with orange trees. Plants and flowers were pro- 
duced in abundance, and considerable space devoted 
also to fruits, peaches, nectarines, grapes and melons. 

When the major work was completed and the farm 
had been converted into a rarely beautiful park, the 
estate was thrown open to the public. Mr. Duke 
wished every one who passed that way to enjoy it. But, 
as is often the case, the privilege was abused. Resi- 
dents of the neighborhood were considerate, but visi- 
tors pouring in from other points trampled lawns, 
picked rare flowers and broke down shrubbery. Finally 
in August, 1915, an automobile party from Pennsyl- 
vania invaded the estate, picnicked on the lawn in 
front, trampled flower beds and left the place littered 
with bottles, boxes and newspapers. That was more 
than the owner could tolerate. While a large part of 
the estate was left open to visitors, their privileges were 
restricted. 

Much as this transformation of a Jersey farm into 
a wonderland of forest, streams and fountains de- 
lighted Mr. Duke, he was more interested in creation 
than in possession. “It was always the unfinished part 
that held his interest,” a friend remarked. “He took 
more pleasure in painting the picture than he did in its 
beauty when finished.” 

“I wonder how many trees and shrubs you have 
planted and transplanted,” Mr. Allen remarked one 
day, as they were discussing Duke Farms. 


197, 


JAMES B. DUKE 


“More than two millions,” was the quick answer. 

“Do you really know how many?” 

“Yes, I have a complete record in my office.” 

He knew the number and the exact cost of every 
item. 

Generous to employees, he would not tolerate any 
delay or interference with his plans. Faithful work- 
men who wished to work must be protected at any cost. 
Only one strike occurred in the years of construction in 
the estate, and he ended that immediately. In Sep- 
tember, 1907, the tobacco magnate “made a record as 
a strike-breaker,”’ as Somerville dispatches to the New 
York newspapers stated, by landing seventeen union 
hod-carriers in the county jail, breaking the back of 
what was intended to be an extensive strike before it 
was an hour old. 

Mr. Duke and his bride had just returned from an 
automobile tour through the Eastern States. A large 
addition was being built to the residence, and wishing it 
finished as soon as possible, the owner was personally 
superintending the construction. To hurry the work 
along, the contractors imported additional bricklayers. 
But they failed to get enough hod-carriers to serve 
them, and Italian day laborers were employed. The 
union hod-carriers, also Italians, went on strike and 
gathered around, threatening to attack the non-unionists 
and stop the whole force. 

Mr. Duke, incensed, got into action at once. Laying 
down the law to the strikers, he telephoned for the 
police and almost before they knew what was taking 
place the trouble-makers were rounded up, placed in 
the “Black Marias” and were on their way to prison. 
That was the last strike he was ever troubled with. 

Hospitable enough, he resented unfairness even in 

198 


CREATING A WONDERLAND 


his charities. Planning a Sunday school picnic, a neigh- 
boring minister asked if the affair could be held in the 
park. Certainly, Mr. Duke said, and if they would 
make it a union picnic, for the children of all the 
neighboring churches, he would gladly pay all the ex- 
penses, for stands, band music and refreshments. When 
the bills were brought in, the charge for tables and 
seats seemed exorbitant. The lumber was still on the 
ground, and Mr. Duke had his carpenter measure it. 
Charged for considerably more than had been deliv- 
ered, he discovered that the lumber had not been 
bought, but was to be returned, and the money used 
for church purposes. 

With scarcely a thought, Duke would have given 
ten times as much to the church. But he refused to be 
“done out” of any amount, however small. “The par- 
son took back his memorandum for ‘correction’?” a 
friend who was at the Somerville farm related, “and 
at the same time received a hair-raising lecture on the 
evils of cheating the poor children of a whole com- 
munity out of money given for their pleasure, to pay 
the debts of grown-ups, even though it was for a 
church.” 

Remaining a bachelor until he was forty-eight, Mr. 
Duke in 1904 was married to Mrs. Lillian N. Mc- 
Cready, who had been the wife of William D. Mc- 
Cready, a New York broker. A year later, naming as 
co-respondent one of her former suitors, he was granted 
a divorce by the courts of New Jersey. Though he 
was the innocent party and under no further obliga- 
tions, Mr. Duke provided liberally for her support. 
Never seeing her again, to the end of his life this un- 
happy incident was to him a closed book. 

On July 23, 1907, he married Mrs. Nanaline Lee 


199 


JAMES B. DUKE 


Holt Inman, widow of Walter Inman, of Atlanta, Ga., 
and in this union found his greatest happiness. Five 
years later a daughter was born to them. 

Upon his wife and only child, Doris, who was born — 
November 22, 1912, Mr. Duke lavished his affections. — 


“It was for them that he built one of the finest resi- 


dences in New York. The white marble palace which — 
stands on Fifth Avenue at Seventy-eighth Street, over- 
looking Central Park, was constructed and equipped 
with all that architectural genius and decorative art 
could afford. 

The furniture, largely of Louis XV and Louis XVI 
design, included examples of the best periods of France. 
In the main hall hung notable works of famous British 
painters, Gainsborough’s “Lord Gwydyr,” Hopner’s 
“Mrs. Deninson” and Raeburn’s “English Gentleman in 
Red Coat.” An Ispahan palace rug covered the floor, 
the sofa was of Beauvais tapestry and near by stood two 
statues by Couston, his “Girl Playing the Flute” and 
“La Musique.” 

Hopner’s “Lady Charles Fitzroy” and Freeman’s 
“Prince Hoare,” paintings of rare merit, adorned the 
walls of the drawing room, which was furnished in the 
style of Louis XVI, and contained rare Japanese vases 
and an attractive terra cotta figure, CJodion’s “Little 
Girl with Tambourine.” 

In the dining room were Regence tapestries, a Bavon- 
niéres tapestry screen, and Chinese temple jars of the 
Yung Chang period. A large Cobelin, “Le Memo- 
rable Judgment de Sancho,” hung in the second floor 
hall, which also contained a notable painting, the “Mar- 
chioness of Wellesley with Her Sons.” 

These were by no means all the art treasures Mr. 
Duke owned. Valuable Gothic panels and tapestries of 
the sixteenth century and the French renaissance, works 

200 





j ‘oi Oe he FRE ze 
‘ROUGH POINT,” THE SEASIDE ESTATE AT NEWPORT 








THE FIFTH AVENUE MANSION, OVERLOOKING CENTRAL PARK 





CREATING A WONDERLAND | 


of Flemish and French artists, “Betrothal Scenes,” 
“Musical Festivities,” “The Hunt” and others were 
among his treasures. 

“Rough Point,” the Dukes’ summer home at New- 
port, is one of the most attractive estates in that resort 
of wealth and fashion. Spending the summer in New- 
port for several seasons, leasing one or another well 
known mansion, in 1922 they bought this residence 
from the Princess Anastasia of Greece. 

Built by Frederick W. Vanderbilt in 1886, “Rough 
Point” was occupied by his family for a number of 
years, the dwelling enlarged and the grounds beauti- 
fied. In 1906 the property was sold to Mr. and Mrs. 
William B. Leeds, who were there only one summer. 
After Mr. Leeds’ death the mansion was owned by his 
widow, who spent most of her time abroad, in Paris 
and Athens, eventually marrying the brother of the 
King of Greece, and becoming the Princess Anastasia. 
Although she did not reside in Newport for years be- 
fore the house was sold, the place was kept in fine con- 
dition, and remained, as it is now, one of the most nota- 
ble places on Bellevue Avenue. 

After becoming chairman of the British-American 
Tobacco Company in 1912, Mr. Duke spent much of 
his time in London, but had no permanent residence 
there. At the beginning of 1914, not many months 
before the World War began, he leased Crewe House, 
on Curzon Street, Mayfair, his arrangement with Lord 
Crewe being for a lease of six months, with the option 
of purchase. But soon after England declared war, 
he gave up his London residence, returned to America, 
and remained in this country. 

“Crewe House,” one of the few detached residences 
in Mayfair, has a large and attractive garden, contain- 
ing thirty apartments. When the building was reno- 

201 


JAMES B. DUKE 


vated after a fire in 1911, a new dining room and a 
picture gallery were built at the back of the house. 
The structure ranks with the most imposing and elabo- 
rate mansions in that favored quarter. 

But one of Mr. Duke’s greatest enjoyments was in a 
more modest establishment than this. His business 
centering in New York and London, immersed in af- 
fairs he had resided away from his native State for 
thirty years. But “the tar was still on his heels,” as 
they say in North Carolina. He had always cherished 
the idea of some day going “back home.” As he began 
developing Southern water power on a large scale, the 
idea grew upon him. His power and other interests 
centering not in Durham, the home of his youth, but 
in Charlotte, he erected in Myers Park, Charlotte’s 
residential suburb, a handsome home-like structure, 
“Tynnewood,” where he found the companionship of 
neighbors and friends and the Southern atmosphere he 
missed in the larger cities. 

The nearest stream of any size, the Catawba River, 
being twelve miles away, pipes were laid, pumping ap- 
paratus installed, and a lofty fountain constructed. 
Standing on his lawn, throwing into the air a column 
of water eighty feet high, this was the most conspicu- 
ous and attractive feature of the landscape. Driving 
for miles around to gaze at it, people told each other 
how many thousands of gallons it spouted, marveling 
at the way in which money was literally “poured out” 
to secure this effect. It did cost a pretty penny, but 
Mr. Duke regarded it as a good investment for him, an 
entrancing sight, delighting his eyes and soul. 


202 


CHAPTER SIXTEEN 
The Man as Others Saw Him 


HAT manner of man was this Southern farmer’s 
son who had become one of the masters of 
industry and finance? 

“In form and feature Mr. Duke looks a well-bred 
Scot, robust, standing erect six feet two inches in 
height. The large head, covered with red hair, has a 
broad brow, straight nose, firm, good-tempered, kindly 
mouth, clear eyes, which look at you reposefully with- 
out criticizing you. A fresh, healthy coloring sets off 
the strong face and shows his British ancestry,” Mr. 
Fuller, his associate and counselor, wrote of him, when 
he was in the midst of large affairs. 

“FYis dress is simple and expresses no vanity. In 
manner he is positive, never petulant, but always rea- 
sonable; taciturn, but ready and eager to state his rea- 
sons for any opinion or judgment. He does this with 
a power spontaneously springing from the merits of his 
position, and is prepared to argue with logical cogency 
when necessary; willing to yield if shown to be in error, 
without a trace of obstinacy or pride of opinion seeking 
the truth regardless of its source. So just a man, he 
does not flinch from acknowledging as his own errors 
and unsuccessful expedients or enterprise first suggested 
by himself, and is careful to credit successful sugges- 
tions to those who made them. Possessed of a memory 
remarkable for its tenacity and accuracy, he is able to 
summon instantly to his aid all that he ever knew or 
saw or did or heard bearing on the subject under con- 
sideration. 

“Self-reliant, quick, cautious from prudence, not 
timidity; he is cool and courageous in action, and mag- 
nanimous in victory. Wise, he discerns a flatterer from 

203 


JAMES B. DUKE 


afar, but values praise from sincere admirers. Al- 
though much sought after by other successful men for 
association in great enterprises, he is entirely free from 
vanity or self-conceit. Modest and retiring in his man- 
ners, in social life his speech is without cant or hypoc- 
risy. Intolerant of deception or any form of lying or 
dishonesty, the frankest, most candid of men, he never 
takes refuge in a falsehood. If unable or unwilling to 
disclose to a questioner facts which he prefers to hold 
in reserve, he never hesitates, but politely declines to 
speak on the subject at all. 

“A most thorough man, in intimate touch with every 
branch and all departments of the great business he 
manages, so competent and versatile that among the 
officers and departmental heads of his enterprises it is 
frequently remarked, and never disbelieved, that he 
could take the position of any man in the organization 
and do his work better than the incumbent... . 

“In political association Mr. Duke is a Republican, 
because he believes that the economic policy of that 
party is the accepted sentiment of the country and as- 
sures more happiness to more people. While his sym- 
pathies naturally rise and fall with those of the people 
among whom he was born and where he passed his 
young manhood, his judgment guides his action. A 
patriotic American, he loves his whole country and fol- 
lows with alacrity his duty in helping to make it first 
in every heart. 

“The legend tells that a great king of old had a 
messenger at his elbow when he prepared a feast to 
whisper to him that he was only mortal. In prosper- 
ity it is a hard lesson to repeat. The chief office of the 
American Tobacco Company is furnished in elegant 
massiveness, but opposite the large chair set for the 
president there hangs, in singular contrast, on the walls, 

204 


AS OTHERS SAW HIM 


the picture of the first log-house factory of the Dukes’ 
and standing beside it the venerable founder of the 
business. The president had it placed there to remind 
him of the struggles of his youth, and to give him 
patience with the humbler things that come before him. 
He did not choose to forget, and wanted to remain 
humble as well as to achieve great things. 

“Mr. Duke has given freely to the benefactions cher- 
ished by his father, but his governing idea in giving is 
to give work. He delights in undertakings that will 
give work to those who want to help themselves, and 
believes its divine radiance is felt in widening waves of 
influence, and that every worker won is a missionary 
to the idle. 

“Tf there is any chord that rings highest in his 
thoughts it is this eagerness to give those who would 
have it work. Work for its own ennobling and saving 
sake, work for the unselfish care of others. He has 
proven that he could be a great minister of finance, but 
he has scant patience with the school of finance that 
makes money breed money by artificial methods. He 
likes the bustle of the market place. The developed 
mold of his mind requires huge metal. Whether this 
consists of big business abroad or terracing the meads 
and meadows of broad acres into smooth lawns and 
setting plantations and making parks with vistas of 
classic statues for his own home, the effective way of 
helping some one to help himself is the plot of his 
work. Like the motion of the sea, it never tires, but 
inspires. 

“When he believes he is right, and when he has 
asked his ever-recurring question, why? and is satisfied 
with his answer, the criticisms of those who do not com- 
prehend his actions, or, comprehending, choose to dis- 
tort them, neither disconcert nor divert him. He un- 

205 


JAMES B. DUKE 


derstands that the man who reforms business as well as 
politics pays the penalty. He is not bookish, has few 
theories or fancies. His study is men and their deeds. 

“His judgment of men seems intuitive and unerring. 
From the highest executive officer to the head of the 
humblest department, he knows that the men to whom 
he gives his unstinted confidence will repay it with a 
single devotion. He returns this devotion with boyish 
sincerity. 

“The hundreds of young men sent out by him to 
home and foreign markets bring back with pride what 
they are sent to get, and his kindly praise is valued by 
them above their earnings. He is proud of and re- 
joices in the fact that there is no royal road to promo- 
tion in his service, but that merit clears the way for 
any possessor. 

“Nothing gives him greater gratification than to see 
the men employed in the company becoming his part- 
ners by investing their savings in its securities—in which 
they know there is no ‘water’ (to use the slang of the 
Exchanges) save the sweat from the faces of the men 
whose brains made them worth their claims in gold. 
They are another name for the magnificent physical 
properties that ornament the great countries of the 
world and the intelligent toil which has made their 
products a necessity wherever luxury gives innocent 
enjoyment. 

“In creating a monumental, permanent capital, and 
in directing this aggregate to generating returns, Mr. 
Duke has become possessed of a princely fortune, and 
lives in manly opulence. He allows no parasites or 
prodigals, who calmly take for granted their superior- 
ity, to grow rich by his favor or fatten at his expense. 
The idle rich do not interest him, but the man with a 

206 


AS OTHERS SAW HIM 


single talent, well employed, commands his attention 
and admiration.” 

High praise, you may say, high praise indeed; yet 
no more than Mr. Duke’s associates thought he de- 
served. 

If any consider this too eulogistic, the tribute of 
friendship, inspired by admiration and intimate asso- 
ciation, let us look upon another picture, presented not 
by one of his associates, but by a journalist who had 
never seen him before, Ben Dixon McNeill, and pub- 
lished in a newspaper which fought the trust consist- 
ently and had never been sparing in its criticism, the 
Raleigh News and Observer. 

It is a picture of Mr. Duke among the “home folks” 
down in North Carolina in the latter years of his life, 
when he was constructing power plants, encouraging 
cotton mills and building up the Southern Power Com- 
pany. He was under attack at the time, for his power 
system had been assailed as his tobacco companies were, 
and he had gone into the courts to defend the right to 
charge rates that would be profitable and pay dividends 
on his investments. Opponents were charging that he 
was trying to “grab up all the water powers” and cre- 
ate another monopoly. Many of the “down homers” 
were not friendly then. He was being “roasted” by 
opposition newspapers. But he went his way steadily, 
paying no attention to the attacks, confident that some 
day they would understand what he was trying to do— 
devote all this to the service of his people. 

“Buck Duke is approachable,”? McNeill wrote. 
“Anybody who has the temerity can go up to him 
wherever he is and introduce himself. He is not sur- 
rounded by any company of guards and flunkies like 
others of the small company of America’s half-dozen 

207 


JAMES B. DUKE 


richest men. A dozen people interrupted him in a 
day’s time in Shelby last Wednesday. Among them 
were newspaper men gathered there in their annual 
convention. 

“John D. Rockefeller, whom he admires profoundly 
as the great American of all time, is as well known in 
Ocracoke as he is in Wall Street, Charles M. Schwab 
a little less well known, and Henry Ford, another man 
greatly admired by Mr. Duke, is a sort of a household 
standby in millions of homes. But this Tar Heel, who 
ranks about third among them in the measure of his 
wealth, nobody knows. 

“And yet any one of them is harder to get at than 
Duke. None of them ever goes into a little court- 
house and sits down among the folks and looks on 
while a case is being heard. None of them ever slips 
out into the grand jury room to smoke. None of them 
is ever seen walking about the streets of a small town 
with none to shield him from the public. Buck Duke 
is his own shield. 

“People who are used to being interviewed have a 
lot of set phrases that they hand out from time to time. 
Most of their ideas are so well known that nobody has 
to go to see them to interview them. But Buck Duke, 
once he gets started, rambles along, talking about any- 
thing that pops into his head, saying what he thinks 
about it. Sensation lurks in his words. One minute he 
is like to be commending a farmer for keeping his 
weeds down, and the’ next he is saying something that 
would stand financiers on their heads. 

“After all, it is rather fortunate for him that he 
doesn’t give interviews. He is too straightforward 
when he talks.” 

In a whole day there were three things that he con- 
fessed a pride in, McNeill recalled, a joy that had the 

208 


AS OTHERS SAW HIM 


ring of spontaneity in it—his limousine that had served 
him eleven years, his fountain at Charlotte, and his 
daughter. “Now and again his conversation drifted 
back to his little girl. In his heart there is no dollar 
mark on her.” 

“I paid $11,000 for this car and I have driven it 
100,000 miles,” Mr. Duke remarked. “A while back 
I bought another car, an American car that cost me 
$4,900. I drove it 30,000 miles and threw it away. 
It cost too much—fifteen cents a mile to ride in it, and 
this one has cost me only seven and a half cents. Buy 
good automobiles and good men, buy good anything. 
They pay profits.” 

“Kaleidoscopes have gone out of fashion, but talk- 
ing with James Buchanan Duke is like looking through 
one of these archaic contrivances for eight hours,” said 
his interviewer. ‘He is not a conversationalist. His 
mind. works constantly like a great dynamo in one of 
his power plants. For a mile he may ride and say not 
a word, and then a spark will come up from him, un- 
related to anything that he has said before. 

“Tt may be to remark that Henry Ford is one of the 
greatest merchants in the world or that somebody had 
better watch the Chinese or that Theodore Roosevelt 
was a dinged fool or that Frank Page ought to build 
his roads an inch thicker or that a man goes fishing only 
because he thinks he will get something for nothing, 
or that there ought to be a tax of twenty-five cents the 
gallon on gasoline to make people quit riding so much. 

“Or perhaps that he has a profound contempt for 
politicians or that John D. Rockefeller is the greatest 
American, or that some day, and because of his own 
foresight, a town will reach from Gastonia to Charlotte 
or that he would like to see codperative marketing win 
out in tobacco so they will not plant more than the 

209 


JAMES B. DUKE 


world can smoke up, or that he can’t see why the news- 
papers keep after him. 

“About the height of misapplied energy is trying to 
direct, or divert, the Duke mind when it is function- 
ing. No use whatsoever to dry to draw him out on 
something. He will answer in a flash if the question 
goes home, but often as not it will pass beyond him. 
His mind moves with terrific velocity and just crum- 
ples up anything that gets in its way. And then there’ 
are surprising interludes of recollection from his boy- 
hood, of times when he pulverized leaf tobacco with a 
stick, ‘flailed it out,’ as he expressed it, and then with 
his father, peddled it out over the country. He came 
to Raleigh, he went to Fayetteville, and to all the towns 
about in this section, and as he rode behind the slow- 
moving team, he dreamed dreams. 

“<T always knew that I was going to be rich. As 
early as I can remember, that idea has been in my 
mind,’ he shot out. ‘I saw Elwood Cox not long ago, 
and he was reminding me of how I used to say that 
I was going to be rich when I was at that Quaker 
School.’ 

“But why be rich? Why have hundreds of millions 
of dollars? Somewhere inside him, flashing up some- 
times dimly, there is the notion in Buck Duke that his 
wealth came to him by divine right. Possession vested 
in his hands means prosperity for hundreds and thou- 
sands of people. In the vast reaches of those mill vil- 
lages, that are crowded into the forty miles between 
Shelby and Charlotte, his own genius has made work 
possible for thousands. 

“Americans don’t work enough. They are too care- 
less. They can’t make this car. No man ought to be 
allowed to live if he will not work. No matter if he 
has millions or if he has nothing.’ He called off num- 

210 


AS OTHERS SAW HIM 


bers of idling millionaires, devastating them with a 
gesture. Work. That is the passion of Duke’s life. 

“<Tf you like the thing you are doing, it is enough. 
You will succeed at it, and you don’t need to do any- 
thing else.? Fish? Well, maybe for some who have 
not learned to work. These mill people here can swim 
and frolic in Mountain Island lake when it is done. 

“Millions have come to him because he worked for 
them, and because he had the judgment to buy the 
right sort of men to work for him. He believes that 
very firmly. ‘Cheap men don’t pay. Build up your 
organization with costly men. Let them make profits. 
Give them part of yours and you will get it back.’ 
Time and time over he reiterated that philosophy of 
business. ‘They pay me good profits,’ he would say 
of some of his best men. 

“Why should these people, these mill operatives, 
these mill owners even, hound him about his water 
power? Had not these streams tumbled down out of 
these mountains for centuries and none noticed them? 
Had he not invested his money in them when men 
called him foolish? They were here hundreds of years 
before he bought them. Even now there are other 
streams. He has not bought them all. If they are 
not satisfied with him, he will cancel any man’s con- 
tract. He actually made that proposal during the 
week. 

“<T have never made a cent out of it, and I never 
expect to make a penny out of it.’ 

“Duke waved his hand in the direction of a great 
hydro plant. That statement has often been made in 
the last year. ‘If it was just power I want to develop 
and sell, I have got a site in Canada that would de- 
velop two million horse power, and I could sell every 
bit of it on the ground.” 

211 


JAMES B. DUKE 


“Wedded as you are to dividends, what does it mean 
that you have sunk eighty million dollars in something 
here that will never yield you a penny?” the news- 
paper man asked. 

“J was born in North Carolina and 1 am sixty-six 
years old,” Mr. Duke said. “It is time I was begin- 
ning to think about a monument. I want to leave 
something in the State that five hundred years from 
now people can look upon and say that Duke did that. 
Every man owes something to the State he was born 
in, and this is what I want to leave North Carolina. 

“Twenty-five years from now,”—he continued. 
Then he painted, with surprising vividness for a man 
to whom books are for lawyers and preachers, a picture 
of what Piedmont Carolina will look like. It was a 
great vision—a country, a whole State, that will no 
longer pay tribute to coal barons, a country where agri- 
culture and industry go hand in hand, driven alike by 
the mystery that Ben Franklin pulled down out of the 
clouds. <t 

“T am going to leave it—” But at the end of the 
sentence he put in again, how he would denounce the 
writer if it were printed. ‘“Men’s wills are not printed 
before their leave-taking, anyhow,” the newspaper man 
wrote. “North Carolina can wait for the reading of 
the will of Buck Duke.” 

“That fountain yonder is mine.” He pointed across 
the gentle hills of Myers Park to where a column of 
water shot fifty feet above the tops of the trees. The 
sun caught it and flung back a rainbow. Presently the 
Rolls-Royce swung into the driveway before his man- 
sion and the fountain came into full view. The 
stranger could feel Duke’s eyes upon him, watching for 
some sign of approval. 

212 


AS OTHERS SAW HIM 


“Tt was a surpassingly wonderful sight,” McNeill 
said. ‘Duke had planned it all himself. Somewhere 
down in him there must be something more than dol- 
lar marks. There is something human and warm in a 
man that could lay out those grounds and set that 
house among them. He wandered off down the ter- 
race to look at it. It was water in motion, and after 
all it may have been symbolism. Maybe it reminded 
him of water gushing through mighty generators out 
on the Catawba River.” 

“Do you think I am a dangerous man to have loose 
in the State?” Buck Duke asked it quietly, almost 
wistfully, one might have thought. “There was noth- 
ing of the driving, ruthless, powerful, pitiless master 
of one of the world’s greatest industries, nothing of 
the man who could make his world tremble,” the jour- 
nalist wrote. ‘There was conviction in his voice, he 
who had—by his own words—brought agriculture out 
of its bondage, and who, back again in the State where 
he had begun his career, salvaged its waste rivers and 
made them available for millions.” 

Strangers might have considered him rather cold and 
reserved, but his intimates knew Mr. Duke as a warm- 
hearted, loyal friend, considerate as he was able, con- 
stantly looking out for their interests. Probably no 
man of his time wrote so few personal letters, which 
gives to this, written to Mr. B. N. Duke, who was seri- 
ously ill at St. Petersburg, Florida, in February, 1919, 
an added significance: 


“My Derar BrorueEr: 

“T have received your two letters and was very glad to hear 
from you and to know that you continue to improve. You 
must not get impatient. It has taken you a long time to get 
into this condition and will require time to get cured. . . . 


213 


JAMES B. DUKE 


“At any time I can serve you don’t fail to call upon me. I 
have your interest at heart and it has always been a pleasure to 
help you in any way I can. You are the dearest brother in the 
world, and my heart goes out to you in your many afflictions. 
I know that you have always been ready to serve my every 
interest and desire and I cannot write or even tell you of my 
love and deep appreciation of what you have been to me since 
we were little boys together. 

“We are having plenty of water and the power company is 
doing well. The construction work is moving a little better. 
The country, yes the whole world is in a very chaotic condi- 
tion and I think it will be a long time before normal times 
will return. 

“Please excuse all mistakes in this letter as it is the first I 
have attempted in ten years. 

“With a heart full of love and affection, I beg to remain, 

“Your devoted brother, 


“]. 5. Dome” 


Employees and business associates were devoted to 
him. Mr. Allen, who was closely associated with Mr. 
Duke and succeeded him as chairman of the Duke En- 
dowment, said of him: 

“One of his traits of character which I always ad- 
mired intensely was the way he overlooked the numer- 
ous adverse criticisms by those who misunderstood him, 
many of them from sources within his native State, and 
went on preparing for and carrying out the great plans 
which he had in mind. Despite such evidences of lack 
of appreciation, he realized that he was doing the right 
thing and determined that nothing should cause him 
to swerve from the course he had mapped out. At 
times, when his attention would be called to some of 
these things, instead of showing resentment, as most 
men would have done, he would smile and say: ‘Pay 
no attention to them.’ This characteristic, to my mind, 

214 


AS OTHERS SAW HIM 


was one of the surest possible evidences of his great- 
ness.” 

Broad in his beliefs, seeing the good in all denomi- 
nations, he held firmly to the faith of his fathers, . 
saying he considered the Methodists “more broad- 
minded than others.” But when Mr. Allen advocated 
bringing the different denominations together in a har- 
monious whole, Mr. Duke opposed the idea. 

“No,” he said; “that would be the biggest kind of 
mistake. Competition in religion keeps up the interest.” 

One night, not many months before his death, he 
heard a sermon over the radio that impressed him by 
its logic and eloquence. The possibilities of broad- 
casting such a discourse excited his imagination. Next 
morning he expressed his ideas to his associates at his 
office. That was to build a great church, a cathedral 
for all the people, with the best organ and choir that 
could be procured. He would invite the ablest min- 
isters from this and other countries, regardless of de- 
nomination, to preach there. With a powerful radio 
station, he would broadcast the services so that mil- 
lions could listen in and any one in the land could enjoy 
the loftiest sermons and most inspiring music. ‘That 
was one of his ideas he did not live to carry out as he 
had planned, but which may be translated into reality 
where the cathedral-like chapel and School of Religion 
form the very center of the numerous structures of 
Duke University. 

“Fie was a man with a big, warm, melting heart,” 
Mr. Allen says. “He indulged in few amusements, 
but was fond of good motion pictures and had each of 
his homes equipped with machines so that he could 
enjoy selections of his own choosing with his family 
and friends in the privacy of home. I recall, after 
enjoying with him and others in his home in Charlotte 

215 


JAMES B. DUKE 


a picture through which ran a touch of pathos, that 
when the lights came on, there were tears in his eyes, 
and his first remark was: 

“«T liked that picture because it made me feel like 
crying, and I am not ashamed to cry.” 

“Whenever subjects arose which he believed had a 
bearing on the national welfare, on which he had de- 
cided views, he would often say: 

“J wish I had a talent for public speaking so that I 
might go out and present this subject to the people in 
the light in which I see it?” 

Detesting publicity, he never made a public speech 
in his life, but friends considered him, in business coun- 
cils and private conversation, one of the most effective 
speakers they ever heard. 

“It so happened that I was with him in England in 
1914, when the great war was declared,” Mr. Allen 
recalls. “The very next day I heard him counseling 
his British friends to plow up their parks and sow 

-wheat. He foresaw the war might be long. He knew 
England was largely dependent upon imported food- 
stuffs and he foresaw the possible difficulties of ship- 
ping, to say nothing of what was likely to be the mount- 
ing cost of all necessities of life. 

“So strong were his convictions that immediately 
upon returning home he had hundreds of acres of his 
own land in New Jersey plowed and sowed to wheat. 
But it was a couple of years afterward before Europe 
awoke to the realities of the situation and commenced 
to make strenuous efforts at home. That was only one 
instance of his farsightedness and the practical interest 
he took in public affairs.” . 

Mr. Duke’s personal characteristics which vividly 
impressed those in daily contact with him have been 
strikingly set forth by Clinton W. Toms, president of 

216 : 


AS OTHERS SAW HIM 


the Liggett and Myers Company. In thinking of him 
there comes to mind, Mr. Toms says: 


“His power of concentration—his ability to put into any 
one task his whole power and then to turn around and do © 
the same thing with another entirely different problem. 

‘His enthusiasm—not the hurrah kind, but the intelligent, 
forceful expression of a great personality. 

“His faculty of putting emphasis where it belonged, readily 
discerning between the essential and the non-essential. 

‘His power to inspire men to be something and to do some- 
thing, creating within them a real ambition to succeed. Often 
by praise and then again by fair and just criticism, even 
though at times it might be severe, he enabled men to over- 
come a weakness—and they were grateful to him. 

“His consideration for men—those who worked under him 
were always given more than due credit—and his desire that 
those who tried to do their part should be liberally rewarded. 

“His big-heartedness—a kind and sympathetic nature. 

“His love and admiration for his father and his brother. 

“His great faith—a genuine faith—a firm belief in the 
Eternal; a strong confidence in the Church and the Christian 
religion.” 


217 


CHAPTER SEVENTEEN 
A Business Man’s View of War Problems 


T the very beginning of the World War, in 1914, 

Mr. Duke was convinced that the United States 

would inevitably be drawn into the conflict, and that 

the change in financial conditions would make New 

York the banking center of the world, and on his re- 

turn to America he urged upon his banking friends the — 

importance of preparing to finance foreign operations 
on a large scale. 

“Send to London for the best experts we can get in 
international banking and foreign exchange,” he ad- 
vised. ‘We are novices in this, while they are the 
ablest and most experienced on earth. You know 
hardly anything about foreign banking and financing. 
They know everything about it. Let them show us 
how to do it.” 

The titanic struggle being primarily a contest not 
of armies but nations, the effective use of economic as 
well as military resources would count mightily in the 
final decision. Food was the vital factor in England, 
as any one, in his opinion, should realize, and he was 
amazed when the British authorities delayed taking 
strenuous measures to increase food production. 

“Starve England!” was the German cry, the subma- 
rines centered their attacks on vessels carrying supplies 
and munitions, and the plan came perilously near suc- 
ceeding. British admiralty officials admitted, early in 
1917, that there was scarcely more than a few weeks’ 
surplus food supply in England and, unless the subma- 
rine campaign was checked, Great Britain might be 
compelled to admit defeat. Fortunately the U-boats 
were curbed, shipping was increased by rapid building, 
making up for losses in sinkings, and the flow of food 

218 


WAR PROBLEMS 


was uninterrupted. But at times it was seriously en- 
dangered. 

When the United States entered the war, Mr. Duke 
hoped that this country might avoid the mistakes made - 
by the Allies, and not “muddle through.” As the 
struggle continued, and our officials met with the same 
trying experiences in supplying armies, training troops 
and providing transports that other nations had gone 
through, he was deeply stirred. 

Waste, running into billions, would entail heavy 
financial burdens, to be borne by the people for years 
to come. But more serious was the possibility that our 
resources would be so taxed that America’s forces 
might not be brought to bear in time to be decisive. 

Congestion in transportation, the taking over of the 
railways by the Government; failure of the fuel sup- 
ply, delaying shipping and imposing upon the civilian 
population “heatless Mondays” and other hardships— 
all these, he felt, could have been avoided. 

- He could not understand why a nation which did 
not hesitate to draft its youth by millions into armies, 
calling on them to risk their lives in its service, should 
not dare to draft men for necessary labor in connection 
with the war. In common with many other Ameri- 
cans, he considered it a supreme injustice for the gov- 
ernment to favor civilians who remained safely at 
home, working for high wages, exempt from the draft, 
while at the same time millions of ardent young patri- 
ots were drafted to be transported across the seas, ex- 
posed to the hardships of the trenches, with no com- 
pensation except their beggarly thirty dollars a month. 

War profiteering of both capital and labor seemed to 
him so unpatriotic and needless that he thought people 
should be aroused to the importance of checking this 
wild waste. 

219 


JAMES B. DUKE 


Never pushing himself forward in public affairs, he 
was moved in this emergency to prepare the only article 
he ever designed for publication, making practical sug- 
gestions which he believed would save the nation bil- 
lions of dollars and put the entire war service on a 
more efficient basis. 

“In the last analysis,” he wrote, “this war is a con- 
test of material resources, and great as those of our 
country are they may prove inadequate unless properly 
conserved, fostered and utilized. I was in England 
when the war started and I advocated then that every 
park throughout the British Isles should be cultivated 
so as thereby to supply more home-grown food, lessen 
the outflow of gold and relieve the burden on ship- 
ping. How much better it would have been if such 
action had not been postponed until forced by dire ne- 
cessity! From that day to this I have given constant 
and most anxious consideration to the war and its 
varied problems, because I realized that the Allies were 
fighting our battles and that in all likelihood sooner or 
later we would be fighting Germany either with the 
Allies or alone. 

“While the government has done many things which 
I commend, notably in the Draft Law and the Federal 
Reserve System, I am convinced that in the conduct of 
the war it is pursuing some policies which are funda- 
mentally wrong. Their harmful tendencies must now 
be apparent to all, and so far they are but an earnest 
of the calamitous consequences that may ensue unless 
other methods are adopted—for as yet we are but upon 
the threshold of our war activities. 

“T say this in no spirit of antagonism whatsoever, 
for I believe our public officials are earnestly endeavor- 
ing to administer our affairs to the very best of their 
ability. These things, however, seem so plain and cer- 

220 


WAR PROBLEMS 


tain to me that I am constrained to give expression to 
my views in the hope that so doing may prove a con- 
structive criticism from which some benefit may flow. 
“Running the railroads I regard as a more difficult . 
job than that of running the United States Govern- 
ment. It is gigantic from every viewpoint, whether of 
number of men employed, varying conditions encoun- 
tered, quantity of tonnage moved, amount of capital in- 
vested, extent of trackage, equipment and terminal fa- 
cilities, or annual receipts and expenditures. Hardly 
less can be said of carriage by sea. Their complexities 
and exactions beggar description. From time to time 
have arisen those who advocated Government Owner- 
ship, but the magnitude of such an undertaking, even 
in normal times, has appalled the stoutest hearts, not 
to mention the well grounded fear that, despite all ef- 
forts to the contrary, political influence would, sooner 
or later, seep into, cripple and mar. No one body of 
men, however brilliant, can get the best results. 
“Why, then, when by official admission the Govern- 
ment is being simply overwhelmed in the performance 
(with its own share of delays, troubles and failures) of 
those functions which under our system are its peculiar 
province and rest within its expert knowledge, should 
it additionally encumber itself with the administration 
of affairs in this great new and untried field for which 
it has neither time, faculty nor experience? When I 
consider the vital character of transportation it seems 
to me almost a crime even to think of interference on 
the part of untrained hands, This is no time for ex- 
periments. It is a time when, of all others, the Gov- 
ernment should follow the safe and certain course, 
which in this case means the giving of the freest hand 
and greatest scope to our practical railroad men, for 
who but they are adequate? If we have to train our 
221 


JAMES B. DUKE 


boys in order that they may fight efficiently at the 
front, does it not go without saying that the Govern- 
ment cannot do this job half as well as those geniuses " 
who have spent their lives in this service? pe 

“The deplorable railroad situation of to-day is not 
due to inefficient management. The marvel is that 
they have endured so much and so long. Instances of 
inefficiency are the exception, not the rule. It is due 
to the harassing State and Federal restrictions which 
for many years have bound them hand and foot. Our 
railroad men have been the peers of any. America 
has led the world in railroading. It is a tribute to their 
prowess that England, Russia and other countries have 
turned to America for assistance in their hour of rail- 
road need. 

“Ts it not patent to all that the sensible thing to do 
is to strike off these shackles, turn back the railroads, 
restore them to their rightful position and give our 
railroad men an opportunity to truly and greatly serve 
their country? 

“For a number of years we have tried price regula- 
tion with respect to our railroads. Our laws did not 
stop, as they should have, at forbidding rebates and 
other forms of discrimination, but went further and 
declared that their commodity, transportation, could be 
sold only at the price allowed by the Inter-state Com- 
merce Commission. Now, despite the rise in the cost 
of labor and of all supplies and raw materials, the rail- 
roads have knocked in vain at the door of the Inter- 
state Commerce Commission for such increases in rates 
as would take care of this increased cost of doing busi- 
ness and yield a return on their capital comparable with 
the return upon the capital of other enterprises. Of 
course, railroad securities ceased to be an attractive in- 
vestment, rendering it impossible to procure the addi- 
tional funds necessary to meet the requirements of even 

222 


WAR PROBLEMS 


normal times. Is it any wonder, then, that they were 
not equipped to measure up to the war emergencies? 

“Failing to profit by the experience of the railroads, 
the government last year fixed the price of coal. The. 
consequences are now, unhappily, being too well real- 
ized by everybody. Instead of thereby enabling re- 
quirements of coal to be obtained at what the govern- 
ment considered a proper price, we have seen our ships 
waiting in harbors when shipping was the greatest need 
of the hour, our factories shut down when they should 
have been most productive, our schools and churches 
closed, and even our families shivering in their homes, 
because coal could not be had at any price. 

“Now the Government is restricting the price of food 
products and I see no reason for expecting any greater 
measure of success in this field. 

“These problems are being tackled from the wrong 
end, Had the railroads been allowed to properly in- 
crease their rates they would have had no difficulty 
about their financing, and I feel sure they would have 
proven themselves ready and able to handle our trans- 
portation in all respects adequately and well. If the 
law of supply and demand had been allowed to work 
its natural course with respect to coal, new mines would 
have been opened, old mines worked to their utmost 
capacity, and I am confident our supply of coal for 
every purpose would have been abundant. The same 
thing is equally true of our food products. 

“No better results will be gained with respect to our 
food products by the effort of the Government to cur- 
tail consumption. In this respect it has followed the 
course of England, France and Germany; but the con- 
ditions are not at all similar. In the countries men- 
tioned there are no vast areas of idle land such as we 
have in the United States, so their only alternative was 
to restrict consumption. In this country adequate food 

223 


JAMES B. DUKE 


supplies for ourselves and our allies can be secured 
much more certainly, much more easily and far more 
satisfactorily to all by concentrating our whole efforts 
and necessary funds on increased production, rather than 
by resorting to the meager and doubtful expedient of 
curtailing consumption. 

“Tt is true that this course would likely for a while, 
at first, result in high prices, but with regulations pre- 
venting artificial shortages, nature’s law of supply and — 
demand would inevitably restore prices to their proper 
level. And any large profits temporarily made would 
be a comparatively small price to pay for insuring 
ample supplies, and would be cheerfully borne by our 
people, who are now fretting under the critical condi- 
tions brought about by these restrictive measures. 

“Though the money cost of the war is already colos- 
sal, it is only a small part of what the sum total will 
likely be. Yet even now all government bonds issued | 
for this purpose are selling below par, the market value 
of our securities has dwindled from a fourth to a half 
without regard to their earnings and this shrinkage in 
values is being extended to real estate through the call- 
ing of loans by savings banks and insurance and trust 
companies, who now find better returns for their money 
in other directions. 

“T cannot view these things without great alarm, be- 
cause it means that our financial structure is being dis- 
rupted and, if continued, our money resources may 
prove inadequate to our needs. Our estimated wealth 
of some $250,000,000,000 when we entered the con- 
flict, is fast shrinking to half that amount, so that if 
the war should eventually cost us some $50,000,000,- 
000, as it very likely may, that would be 40 per cent 
of our probable wealth at that time—a tremendous 
burden upon the country, especially when we consider 
the already heavy amount of public bonds afloat. 


224 


WAR PROBLEMS 


“The enormous and unparalleled inheritance taxes 
and surtaxes is one of the foremost causes of this con- 
dition of affairs. They should no longer be called 
taxes, for they have been carried to a point where they 
are, in effect, mere penalties visited upon the success- 
ful business men of this country. 

“But far above and beyond this consideration, they 
do great affirmative harm to all the people, whereas 
they raise, comparatively, only small revenue and under 
a proper system of financing would be unnecessary. 
You cannot thus cripple men whose activities or invest- 
ments produce large incomes without at the same time, 
and to an even greater extent, hurting all of our enter- 
prises and the individuals who are engaged in and de- 
pendent upon them. You are pulling down the pillars 
of our business temples. 

“Reservoirs of wealth in the hands of individuals 
are just as necessary as in the hands of banks and in- 
surance and trust companies, because individuals can 
take risks and undertake enterprises which such institu- 
tions cannot. Instead of the government making pos- 
sible, as at this time it should, the fullest codperation 
of all such men, it is carrying such class legislation into 
the very terms of the latest Liberty Loan Bonds, seem- 
ingly utterly oblivious of the certain and disastrous 
consequences to society at large. 

“This is a great, elemental truth, often overlooked 
and disregarded, but which should be pondered well 
and fully realized by the masses of our people. It is the 
secure foundation upon which rests alike their welfare 
and their happiness. If nobody had accumulated 
wealth we could not have had our extensive railroad 
systems whose mileage exceeds the combined total of 
the other countries of the world, our great business en- 
terprises with their big factories and trained organiza- 
tions carrying our products to all parts of the earth, our 

225 


JAMES B. DUKE 


thriving cities, our great universities, our well equipped 
hospitals, all of which owe their existence to indi- 
vidual success. 

“Take even the bread that you eat. Few carry a 
week’s supply in the home. The farmers produce it 
and many months elapse before it is consumed. Dur- 
ing this period it has to be financed through the hands 
of the miller, the wholesaler and the retailer until it 
reaches the consumer. This is possible only through 
reservoirs of wealth; and the same thing is true of cot- 
ton, corn, steel, coal, tobacco, copper and other products. 

“Contrast America and Russia. American growth 
and development have been at once the wonder and 
admiration of the world, and it is because America has 
been the land of opportunity, giving the very largest 
scope and incentive to individual initiative and endeavor. 
Her men of affairs to-day were the poor boys of yes- 
terday and the poor boys of to-day will be the captains 
of industry to-morrow. Russia, on the other hand, has 
stifled opportunity through the heavy hand of govern- 
ment regulation reaching out into all walks of life. 
There was no incentive to individual endeavor and no 
mighty works have been done there. Stagnation has 
been her portion and ignorance and poverty the heritage 
of the masses of her people. And this is but an illus- 
tration. History is replete with just such instances, if 
we will only read its pages and learn. 

“The following tabulation will make even clearer 
just what I mean: 


Approx. no. 

rs. required 
Net income Balance of or balance of 

Net value of ons%basis Amount of income after Amount of net income to 
estate subjectto subjectto incometax paymentof estatetax aggregate amt. 


estate tax taxation tobe paid incometax tobepaid of estate tax 
$ 5,000,000 $ 250,000 $ 69,680 $180,320 $ 680,000 3% yrs. 
10,000,000 500,000 192,680 307,320 1,720,000 su a 
15,000,000 750,000 327,680 422,320 2,970,000 7 * 
20,000,000 1,000,000 475,180 524,820 4,220,000 bi 
40,000,000 2,000,000 1,130,180 869,820 9,220,000 10% “ 


226 


WAR PROBLEMS 


“Observe, first, that it will take the entire net in. 
come of such estates from three to ten years respec- 
tively to pay the income tax and accumulate a sufficient 
fund to meet the estate tax, leaving no income what- 
ever for any other purpose, not even for outstanding 
business obligations, to say nothing of personal ex- 
penses. Owners of such estates are thus completely 
bereft of power to be of the material aid which they 
might otherwise render. Worse, this is bringing prema- 
ture divisions of estates, thereby taking out of the 
hands of the builders and locking up in the hands of 
fiduciaries fortunes which otherwise might be utilized 
in initiating and expanding business enterprises. Thus, 
these tax laws are in a measure defeating their own ob- 
ject and should be abolished. If additional reason be 
necessary it is found in the enforced liquidation of 
estates in the short period allowed to raise the cash 
necessary to pay these exorbitant inheritance taxes, 
which is not only ruinous to the estates themselves, but 
so demoralizes prices as to be most hurtful to others 
as well. 

“Observe, second, that large estates which have en- 
joyed an average income of say five per cent after pay- 
ing such excessive surtaxes have left only from 2 to 
334 per cent for their net annual return. This has 
induced large sales of all classes of property, resulting 
in gradual but tremendous declines in values, because 
the people who are not so treated by our tax laws can- 
not absorb the offerings and carry the financial load 
entailed. With the gravest anxiety I contemplate the 
consequences to the United States of a continuance of 
such unwise policies. Witness already the difficulty the 
industries of the country are having in procuring neces- 
sary capital to meet increased cost of doing business. 

“Observe, also, that the 4 per cent Liberty Loan 

227 


JAMES B. DUKE 


bonds, as a net result, yield such persons only a return 
varying approximately from I 34 to 3 per cent. In 
brief, it places the government in the anomalous posi- 
tion of seeking to borrow money for its war purposes 
from its citizens at grossly discriminative rates of in- 
terest. It was said this was done to keep the rich from 
putting their fortunes in tax exempt securities. But 
how small, comparatively, such a saving would be. 
And it may result in such an increased rate of interest 
upon war bonds as that the excessive interest charges 
will overbalance any such saving. Remembering the 
combined total of state and municipal securities which 
Congress cannot tax and the 314 per cent Liberty Loan 
bonds which Congress did not tax, will there be any 
saving whatever? Was there not already a plenty and 
to spare of tax exempt securities, if people were of a 
mind so to utilize them? And yet for such a consid- 
eration the government has handicapped its raising of © 
funds by subjecting the bond issues to such forms of 
taxation. 

“Tt is absolutely necessary that the war be financed 
almost exclusively through bond issues and that there 
should be raised by taxation only sufficient money to 
pay the interest on these bonds and establish a liberal 
sinking fund for their final redemption, in addition to 
the revenues necessary to meet the normal expenses of 
the government. The government, no more than an 
individual, can ‘eat its cake and have it too.’ It cannot 
continue to sell bonds to those whose incomes are too 
largely taken by taxation. 

“This taxation, as regards manufacturing and pro- 
ducers, should be in reality a tax on the excess of war 
over pre-war profits—not one merely so in name, as at 
present; and it should be classified with respect to the 
various lines of endeavor, such as steel, transportation, 

228 


WAR PROBLEMS 


coal, textiles, explosives, chemicals, tobacco and other 
products. My reason for this classification is that there 
are some businesses which show excess profits that are 
not due to the war and they should not be taxed to the 
same extent as are those whose tremendous excess prof- 
its are due directly to the war. This method has al- 
ways appealed to me as being the fair and equitable 
means of raising the major portion of the necessary 
additional taxation, because it places the burden on 
those who are reaping the benefits. Here England 
has set us a conspicuous example to follow, and has 
found the revenues from such sources and 25 per cent 
income tax ample, as we will here if we allow busi- 
ness to proceed along normal lines. The measure of 
the tax upon such excess should be only our absolute 
requirements—8o per cent, as in England, if this be 
necessary, but leaving as a reward to incite individual 
endeavor all that existing conditions will allow. If 
this form of taxation and a reasonable income tax and 
surtax (say 25 per cent maximum) do not suffice, it 
should be supplemented by a tax upon the distributors 
(not producers) of commodities by way of a percentage 
upon their turnover, and not by way of a direct con- 
sumption tax. 

“While we are forcing men to fight, we are leaving 
them to work when and where they please. This is 
not only utterly inconsistent and grossly inefficient; it 
is rank disloyalty to our soldiers. For no one will deny 
that it is futile to send troops to France unless they are 
properly equipped and maintained there. It is idle to 
say that the labor problem will solve itself. No one 
can read our papers, study our conditions, see the idlers 
and loafers on our streets and hear the cry for labor 
that comes from all industries without being convinced 
that all is not well in this particular. 


229 


JAMES B. DUKE 


“Our Draft Law did not go far enough. It should 
also have included, for purposes of labor, every man, 
woman and child over 16 years of age and mentally 
and physically fit. I saw in the New York Times an 
interview with Senator France of Maryland descrip- 
tive of a Bill he had introduced in Congress to rem- 
edy this situation. What he said has my heartiest ap- 
proval. He is proceeding along the right line. We 
are serving just as truly, as honorably and as patrioti- 
cally in tilling the soil or working the mine, or running 
the train, or wherever our lot may be cast, as in ‘going 
over the top’ on a shell-scarred field in France. What 
is toil in field or factory to risk of life in battle? No 
good American should object to any measure which will 
insure the essentials of victory, and none other has a 
right to be heard.” 


230 


SHAPTER EIGHTEEN 
Trinity—New Life in an Old College 


Hx the Dukes began their benefactions to edu- 
cation is an interesting story. Founded half a 
century before, the Methodists had decided that their 
college, Trinity, had struggled long enough in the 
woods of Randolph County, and must be moved to a 
more central location. Bids were invited and Raleigh 
made the largest offer, twelve acres of land and 
$20,500. But the site was limited, the amount pledged 
not sufficient to erect a single building. Gen. Julian S. 
Carr, president of the “Bull Durham” company and a 
trustee of Trinity, strongly favored its location in 
Durham. 

Benjamin N. Duke, who was one of the trustees of 
the Masonic Orphanage at Oxford, had been consider- 
ing buying Blackwell Park and building there an orphan 
asylum. Rev. R. F. Bumpass, his pastor, suggested 
that a greater service would be to acquire the park as 
a site for Trinity College. 

Meanwhile another factor had entered into the situa- 
tion. The Baptists having decided to establish a female 
university, various towns were competing for the in- 
stitution. Durham had offered a site and $50,000. 
Raleigh pledged half that amount. The commission 
decided, however, that the “tobacco town,” with its 
numerous factories, was no proper place for a girls’ 
school. Raleigh’s bid was accepted and the Baptist 
Female University located there. Durham’s pride was 
hurt, the whole town was indignant, and at a mass- 
meeting held in Trinity Church citizens freely ex- 
pressed their feelings. 

Washington Duke was present, and though not given 
to the heated language used by some of the speakers, 

231 


fi 
JAMES B. DUKE ay 
felt deeply this slight to his town., Turning to Mr. 
Albright, the postmaster, a leading Baptist, who sat 
beside him, Mr. Duke remarked that if his own church, 
the Methodists, would bring their college to Durham, 
he would give $50,000 more than Raleigh offered. 

Rev. Dr. E. A. Yates, pastor of Trinity Church, 
overheard the conversation and next day called upon 
the manufacturer, asking if he really meant what he 
said. This was quick action, picking up a casual re- 
mark and turning it into thousands of dollars. But 
Mr. Duke was as good as his word. 

Turning to his son, Benjamin, Mr. Duke asked his 
opinion. 

“Go ahead, father,” was the reply; “it is a good 
cause.” 

Visiting Trinity at the previous commencement, Mr. 
Duke had been impressed by the college and its young 
president, Dr. John F. Crowell, and remarked to a 
friend, “Crowell is all wool and a yard wide.” He 
confirmed his offer. Dr. Crowell was notified, and 
hastened to Durham. 

“Yes,” Mr. Duke told him, “I?ll give that myself, 
if you will bring the college here. Try it out.” 

The amount required for initial buildings was set 
forth, and the manufacturer promised to stand by them 
to the extent of $85,000. 

Securing a site was the next problem. The old fair 
grounds and race track, sixty acres, at the edge of the 
town, owned or held under mortgage by Carr, ap- 
peared to be the best property available. “Let’s go to 
General Carr and see if he will give us the race track,” 
was the next move. Enthusiastic over Mr. Duke’s 
offer, he said: “Yes, I will—gladly,” when asked to 
donate the fair-grounds. 

' They had an ample site, and a promise of $85,000 
232 


TRINITY COLLEGE LIBRARY 





TRINITY COLLEGE 


for construction. But some of the trustees and leading 
Methodists doubted whether that would justify the 
change. 

Dr. Crowell had builders go to Randolph and make 
an appraisal of the existing Trinity property. There 
was really but one large college building, a three-story 
brick structure, containing offices, recitation rooms, dor- 
mitories and an auditorium. ‘We can duplicate that 
building, of practically the same material, for $14,000,” 
the contractors reported. So even the doubters were 
convinced that Trinity could not lose, so far as prop- 
erty values were concerned. 

Raleigh withdrew from the race. Durham was de- 
cided upon. But there was “one more river to cross.” 
Not a few ministers and laymen were firmly opposed 
to removal. “Old Trinity” was dear to them, many 
of them had been educated there, and they questioned 
the wisdom of changing its character or location. 

Dr. Crowell had drawings prepared, showing his 
conception of a college such as could be created on the 
new site—departments of Religion, Science, Law, pro- 
vision for the various classifications of learning—a 
vision of a great institution. 

The final contest was waged at the Methodist Annual 
Conference. Centering their fire upon the young presi- 
dent, who had recently come to the South from Yale, 
opponents openly resented the youthful professor’s 
“coming down here from the North and telling us 
what to do.” “You are only showing us pictures,” one 
speaker scornfully remarked: “things that can’t be 
done, and we never will be able to do.” 

Crowell stuck to his guns. These were not merely 
pictures, he pointed out; they were the expression of 
an ideal, something not possible at the time, but that 
might be done in the distant future. But they could 


233 


JAMES B. DUKE 


make a beginning toward it; could establish a larger 
college in a favorable situation, that would grow with 
the years. Pleading that they “deliver Trinity from 
the bondage of its birthplace, afford it a wider field, 
bring it out into a broader world,” his speech won the 
day. ‘The conference voted, by a large majority, to 
accept Durham’s offer and establish Trinity there. 

Work was begun at once. The fair-grounds were 
cleared, contracts let, and laborers set about transform- 
ing the race-track into a campus. The funds offered 
were barely enough to erect and equip the initial build- 
ings, but the college authorities set bravely ahead. 

The nation was in the grip of a financial panic. 
Money was more than “tight,” it was almost impossible 
to obtain in substantial amounts. ‘Those were the hard- 
est times I ever saw,” Dr. Crowell said. Banks tied 
up deposits. “We’ll give you $10 a day and no more,” 
was told depositors. But the Dukes and Carr stood 
by Crowell, furnishing the means to pay for materials 
and meet the weekly pay-rolls. Bank balances were 
drawn upon almost to the breaking point, yet when 
cash for other things was almost unobtainable they al- 
ways managed to provide enough to keep the college 
forces moving. 

As construction went forward, day by day, there 
were difficulties enough and one serious mishap. As 
the main building, named in honor of Mr. Duke, was 
nearing completion, the tower collapsed, taking down 
with it brick, stone and mortar. But the structure was 
quickly rebuilt, the buildings at length completed, and 
in the autumn of 1892 Trinity opened its doors for 
students on the new site. 

From that day to this Trinity’s progress has been 
steady and continuous. Now the college founded in 
the woods of Randolph, taking the name of its bene- 
factors, is blossoming forth into a university. 


234 





TRINITY COLLEGE 


Born in a log-cabin, nurtured by forward-looking 
men, Trinity was imbued from its inception with the 
pioneer spirit that does not hesitate to venture into 


_ wider fields. Founded by Quakers and Methodists, 
' who combined to establish a school, in 1838, with 


| Brantley York as teacher, the college has a tradition 
| of liberalism, tolerance and breadth of thought that 


has been maintained through all the years. 

Forceful as he was cultured, Dr. York believed in 
the saving grace of education as well as religion, and 
inspired pupils and parents with his own zeal. 

“Union Institute,” as the school was originally 


| called, acquired more than a neighborhood reputation. 


The diminutive building was outgrown. The entire 


' community “turning to,” a larger house, twenty by 
_ forty feet, was erected on a lot of its own, a mile 
| southwest of the old site. This, too, was built of logs, 


but solidly constructed, and a proud day was that when 
the boys and girls, headed by Dr. York with English 
Blair as “captain,” lined up and marched in double 
file from the old to the new school-house. 

A year or two later, in 1841, a two-room frame 
building was erected, with a hall between, and an as- 
sistant employed—Braxton Craven, a young man of 


| promise and talents, then not more than nineteen or 
_ twenty years old. Laboring together in close fellow- 


ship, they built up a school of real merit and value. 
When Dr. York, his sight impaired, departed for 
other fields, later founding York Collegiate Institute, 


| the reins fell into the hands of his associate. A man 


of broad vision, Craven had ambitious plans. Well- 
equipped teachers were sadly needed, North Carolina 
had no college devoted to their training. Here was an 
opportunity to render a wider service. 

In 1851 Union Institute was granted a new charter 
and incorporated as “Normal College,” which was fur- 


235 


JAMES B. DUKE 


ther amended the following year, making the Gover- 
nor chairman and other officials members of the Board 
of Trustees. Afhliated with the State, this was per- 
haps the first institution especially for the training of 
teachers established in the South. Ahead of its time, 
however, adequate support was lacking and in a few 
years the experiment failed. 

But Craven could not permit the enterprise for which 
he and Dr. York had labored through years of strug- 
gle to die. Enlisting the support of his church, he 
turned the institution over to the North Carolina Con- 
ference, in 1856. Coming under direct patronage of 
the Methodists, it was chartered in 1859 as Trinity 
College, with Craven as president. 

For a quarter of a century Trinity was conducted 
under his guidance, he serving as president continuously 
except for the last two years of the war when his place 
was taken by Prof. Wm. T. Gannaway. Not a few 
Southern colleges were swept away by the Civil War 
and reconstruction, but Trinity survived, due to the 
unfailing devotion and energy of one man—Braxton 
Craven. He kept it alive, and through all the years 
never lost his faith in the institution. 

With insufficient income, scanty support from any 
source, the little college had a hard struggle. Its crude 
buildings and small faculty offered few attractions. 
But the instructors were earnest, consecrated men who 
inspired students with their own sense of responsibility 
and duty, and the product was a high type of useful 
manhood. 

Though wealthy families were inclined to send their 
sons to the State University at Chapel Hill, to Ran- 
dolph-Macon or the University of Virginia, Trinity’s 
graduates included some of the “best blood” in the 
State. A few of those who entered, like Walter Hines 

236 


TRINITY COLLEGE 


Page, could not abide the rather primitive conditions. 
The future Ambassador to England, who went there 
in 1871 from Bingham School, wrote letter after letter 
to his mother, criticizing the college, his instructors and . 
fellow students, and begging that he be allowed to 
leave. Departing in the middle of his term, in Decem- 
ber, 1872, he went to Virginia, entering Randolph- 
Macon. But such cases were rare. 

The buildings were old and barn-like, the faculty 
inadequate; but Trinity was doing a work of genuine 
value to Church and State, supplying able ministers, 
teachers, lawyers, training men who became leaders in 
business and the professions. 

The seeds of greater things were in the college, 
which grew steadily, if slowly, in patronage and use- 
fulness. Hundreds of men who became prominent and 
influential looked back with pleasure and gratitude to 
the days they spent at “Old Trinity,” and sat at the 
feet of its Gamaliel. Both of the present United 
States Senators from North Carolina, F. M. Simmons 
and Lee S. Overman, were educated there, and the roll 
of its alumni in the seventies and eighties includes 
many men of prominence in civic and religious life. 

With the death of Dr. Craven, in 1882, came a crisis 
in the life of the college. Prof. William H. Pegram 
was made chairman of the faculty, serving until June, 
1883, when Dr. M. L. Wood was elected president. 
But Dr. Wood, after a year, resigned. For three years 
the chairman of the faculty, Prof. John F. Heitman, 
was the chief administrative officer. A few men of 
means had become interested in the institution, how- 
ever, and in December, 1884, three of the trustees, 
Gen. Carr, Col. J. W. Alspaugh and James A. Gray, 
of Winston, assumed the financial management, con- 
tributing $5,000 annually for maintenance. 


237 


JAMES B. DUKE 


Three years later Dr. Crowell, a brilliant young 
graduate of Yale, was elected president—probably the 
first Northern man chosen, after the Civil War, to 
head a distinctively Southern college. Bringing to the 
institution rare energy and breadth of view, his election 
was an evidence of the broader spirit that prevailed. 

Removal to Durham marked the beginning of a 
new era for Trinity. When Dr. Crowell, after years 
of progressive administration, resigned in 1894, there 
came to the presidency one of the most ardent spirits 
and eloquent preachers the South has known, Rev. Dr. 
John C. Kilgo. Under his administration Trinity 
rapidly expanded. Devoted to him and the institution, 
the Dukes gave liberally to the college, erecting addi- 
tional buildings, beautifying the grounds, and provid- 
ing considerable endowment. 

Not only in material and educational ways did 
Trinity expand. Breadth of view, freedom of thought | 
and opinion were held as basic principles by faculty and 
students. They were not maintained without more 
than one long and bitter struggle. There were stormy 
periods when the very existence of the college was 
threatened. 

Perhaps the severest test came in 1903 when Dr. 
John Spencer Bassett, the Professor of History, in an 
article in the South Atlantic Quarterly on “Stirring Up 
Race Antipathy,” himself stirred up a veritable hornet’s 
nest by this remark concerning Booker T. Washington: 


“Now Washington is a great and good man, a Christian 
statesman, and, take him all in all, the greatest man, save 
General Lee, born in the South in a hundred years; but he is 
not a typical negro.” 


Dr. Bassett was not, primarily, eulogizing the col- 
ored educator, but pointing out that he was a marked 
238 


TRINITY COLLEGE 


exception, one among millions, having in mind the 
Tuskegee educator’s service to his fellow freedmen, 
his rise from slavery to the leadership of his race. But 
the comparison with General Lee, the placing of a. 
negro, no matter from what point of view, above the 
famous white men of his time, was heatedly resented. 
The historian was violently attacked by newspapers and 
many individuals, who demanded that he resign or be 
expelled. Parents were urged not to send their sons 
to Trinity so long as the instructor remained. A boy- 
cott was threatened. 

No one, perhaps, was more surprised at this outburst 
than Dr. Bassett himself. He had not intended any 
disparagement of the leaders of his own people. But 
refusing to be intimidated, he would neither recant nor 
resign. Opposing any invasion of academic freedom, 
his confreres stood by him to a man. 

In a strong address to the Board of Trustees, Presi- 
dent Kilgo declared that “coercion of opinion in all 
times has been a miserable failure”; that “tolerance is 
the foundation virtue upon which American civilization 
has been built and developed,” and said: 


“Bury liberty here, and with it the college is buried. It 
were better that Trinity College should work with ten students 
than that it should repudiate and violate every principle of the 
Christian religion, the high virtues of the commonwealth, 
and the foundation spirit of this nation. 

“Personally, I should prefer to see a hurricane sweep from 
the face of the earth every brick and piece of timber here than 
to see the college committed to policies of the Inquisition.” 


_The faculty, in a notable address, set forth their 
views, concluding: 


“This college has now the opportunity to show that its 
campus is undeniably one spot on Southern soil where men’s 


239 


JAMES B. DUKE 


minds are free, and to maintain that the social order of the 
South need not be shielded from criticism, because it has no 
reason to fear it, because it is not too weak to bear it. Money, 
students, friends are not for one moment to be weighed in the 
balance with tolerance, with fairness, and with freedom.” 


After a session lasting until three o’clock in the 
morning, the Board of Trustees voted, eighteen to 
seven, not to accept Dr. Bassett’s resignation, and 
adopted resolutions stating that— 


‘The search for truth should be unhampered and in an 
atmosphere that is free. Liberty may sometimes lead to folly; 
yet it is better that some should be tolerated than that all 
should think and speak under the deadening influence of re- 
pression. A reasonable freedom of opinion is to a college the 
very breath of life; and any official throttling of the private 
judgment of its teachers would destroy their influence, and 
place upon the college an enduring stigma.” 


Unknown to the Board, the resignations of every 
member of the faculty had been placed in the hands 
of the President, to be presented in case of adverse 
decision against their colleague. Dr. Edwin Mims, 
now of Vanderbilt University, long a member of 
Trinity’s faculty, recalls this as one of the most coura- 
geous instances of collegiate action on record in the 
New South. 

President Roosevelt, in an address at Trinity the 
following year, declared: 


“I know of no other college which has so nobly set forth, 
as the object of its being, the principles to which every college 
should be devoted, in whatever portion of this Union it may 
be placed. ‘You stand for all these things for which the 
scholar must stand if he is to render real and lasting service 
to the State. You stand for academic freedom, for the right 
of private judgment, for the duty more incumbent upon the 


240 


TRINITY COLLEGE 


scholar than upon any other man, to tell the truth as he sees it, 
to claim for himself and to give to others the largest liberty 
in seeking after truth.” 


This declaration of collegiate independence, which 
met with the warm approval of the Dukes and other 
staunch friends of the college, blazed the way along 
which Trinity has progressed for nearly a quarter of a 
century and expressed the ideals of the larger career 
which is just beginning. 

Washington Duke, to the end of his days, was Trin- 
ity’s loyal supporter, contributing large sums to the 
institution. Giving $180,000 for buildings when the 
college was established on its new site, in 1896 he pre- 
sented $100,000 as a permanent endowment fund, add- 
ing a like amount in 1898, and another $100,000 in 
1900, besides other substantial contributions. His 
gifts were continuous and his interest in the college 
unfailing. 

At his death on May 8, 1905, Dr. Kilgo said of him: 
“Fie earnestly desired to do something to push back 
the shadow of ignorance from the minds of men, to 
send forth a clearer and a fuller light of knowledge, 
and to do this he endowed Trinity College.” 

On the campus at Trinity stands a statue of him, 
dedicated with this tribute: 


WASHINGTON DUKE 
1820-1905 


Animated by lofty principles he ever cherished the welfare 
of his country with the ardor of a true patriot; diligent in 
business he acquired riches, but in the enjoyment of them did 
not forget to share with the less fortunate; a patron of learn- 
ing he fostered an institution which placed within reach of 
aspiring youth the immortal gift of knowledge; and when the 
activities of his early life and the sterner struggles of his 


241 


JAMES B. DUKE 


maturer years had passed, he entered upon a serene old age, 
cheered by a lowly piety and sustained by an unfailing trust 
in God, who in all the vicissitudes of life had kept him single 
in his aims, sincere in his friendships and true to himself, 


“Friend of Truth, of soul sincere, 
In action faithful, and in honor clear.” 


In 1910, when President Kilgo, elevated to the 
highest honor of his denomination, resigned to become 
a Bishop of the Methodist Episcopal Church, South, he 
was succeeded by William P. Few, who had been a 
member of the faculty for fourteen years and dean for 
eight years. Continuing also from the preceding ad- 
ministration were Robert L. Flowers, now secretary 
and treasurer of Duke University; William H. Wan- 
namaker, dean first of Trinity, then of the University; 
William H. Glasson, now dean of the Graduate School 
of Arts and Sciences; William I. Cranford, for seven 
years dean of the college, with others of a small but 
able faculty, including that honored veteran of “Old 
Trinity,” William H. Pegram. 

Under the guidance of President Few and these as- 
sociates, and others who joined the staff in the inter- 
vening years, Trinity’s patronage was so largely in- 
creased, its program of construction and instruction so 
widely extended, that the transition from college to 
university was more the entering upon a broader phase 
than the creation of a new institution. 

After Washington Duke’s death, his sons increased 
their contributions, which had been more than liberal. 
Replacing the main building, burned in 1911, they 
added twenty-seven acres to the college property, pro- 
viding for beautification of the campus, new buildings 
and various other improvements. Two years later they 
jointly contributed $800,000 to endowment. 

242 





SONIGTIION ALINING AGOTONI TIM HOIHM ‘ALISHUAAIND AMOG ‘NGWOM YHOU ANATIOO ALVNIGUO-OO AHL 








TRINITY COLLEGE 


Their individual gifts were even larger. Beginning 
in 1898, B. N. Duke gave hundreds of thousands for 
new buildings, dormitories, gymnasiums, athletic 
grounds, lectureships, current expenses and endow- 
ment. Alspaugh, Bivins, Lanier and Branson Halls, 
the Asbury and other structures are due to him, and he 
also gave $100,000 to the Southgate Memorial and 
considerable sums to other buildings. The library, 
erected in 1902, and Jarvis Hall, built in 1912, were 
erected by James B. Duke, who gave generously to 
college purposes and in 1922 contributed $1,000,000 
more for endowment. 

Angier B. Duke, son of Benjamin, and his sister, 
Mary Lillian, now Mrs. Anthony J. Drexel Biddle, 
Jr., of New York, both graduates of Trinity, gave 
$25,000 to Alumni Memorial Gymnasium. Angier, 
who was president of the college Alumni Association 
and had previously donated $30,000, at his death in 
1923 bequeathed $250,000 to the endowment fund. 
Mrs, James Edward Stagg, granddaughter of Wash- 
ington Duke, erected the stone pavilion and Miss Anne 
Roney, another relative, provided the fountain and 
surrounding garden which adorn the campus. 

The benefactions of the family reached their climax 
in 1924 when James B. Duke in creating his Endow- 
ment gave $6,000,000 for land and buildings and prac- 
tically one-third of the Endowment’s net income, 
bringing the total of the Duke benefactions given 
within the lifetime of the donors to approximately 
$20,000,000. At his death, less than a year later, he 
bequeathed directly $17,000,000 more to Duke Uni- 
versity, the successor of Trinity, and ten per cent of 
his residuary estate, making this one of the most richly- 
provided-for institutions in America. 


243 


CHAPTER NINETEEN 
True Friends of the Colored Race 


bs Durham stands a hospital, attractive, excellently 
arranged, well conducted, with an equipment many 
larger institutions might envy. Conducted by negro 
physicians with negro nurses and internes, it is de- 
voted to the care of colored patients. 

Named in honor of Abraham Lincoln, this hospital 
was erected through the liberality of Southern white 
men. Founded twenty-five years ago, at the entrance 
of the first building, which the present structure re- 
placed, was a marble tablet, inscribed: 


MEMORIAM =. 
LIncoLN 1901 HosPIraL 


With grateful appreciation and loving remembrance of the 
fidelity and faithfulness of the Negro slaves to the Mothers | 
and Daughters of the Confederacy, during the Civil War, 
this institution was founded by one of the Fathers and Sons 

B. N. Duke W. Duke 

J. B. Duke 

Not one act of disloyalty was recorded against them. 
Joun Merrick, President 
A. M. Moore, Founder and Supt. 


Behind this is a story that has an interest of its own. 
Strongly opposed to slavery, Washington Duke himself 
owned one slave. When “Ben” and “Buck” and Mary 
were small and Brodie just growing up to working age, 
some one was needed to assist in caring for the children 
and to “help around the house.” White servants were 
almost unknown then in the South, “free negroes” 
were few, and Mr. Duke bought a colored girl, 
Caroline. 

Devoted to the family as only the old-time servants 


244 


AID TO COLORED RACE 


of her race can be to their “white folks,’ Caroline, as 
has been recorded, went with the younger Dukes to 
their Grandfather Roney’s place, when their father and 
elder brother entered the Confederate army, and re- 
mained with them during the war. When slavery was 
ended, Caroline had no idea of leaving the “chillun.” 
Freedom meant nothing to her without them. Going 
back to the farm, she remained with the Dukes and 
served in their household until the children were 
grown, until “Miss Mary” was married, ““Marse Ben” 
an important manufacturer with a handsome home of 
his own, and “Marse Buck” a “big business man, way 
up yonder in New York.” 

Mr. Duke never forgot Caroline’s faithfulness. 
Having given her two small houses, one to live in and 
the other to rent, he bequeathed in his will money and 
stock sufficient to maintain her in comfort all her days. 

Remembering Caroline and thousands like her, 
negro men and women as loyal in slavery as they were 
in freedom, and for whom their “white folks” cher- 
ished an enduring affection, the Dukes were sincere 
friends of the colored people and never lost an oppor- 
tunity to help them. 

Washington Duke had in mind the erection of a 
monument on the grounds of Trinity College, to the 
memory of the slaves and their devotion to the 
Southern people during the war. A modern hospital 
for the white population had been erected and pre- 
sented to Durham by his partner, George W. Watts. 
The negroes had no hospital. Their leading physician, 
Dr. Aaron Moore, was striving to establish such an 
institution, but the negroes, poor as they were, could 
not, with all the pennies they put aside, accumulate 
enough to make a real beginning toward it. Dr. Albert 
G. Carr, the Dukes’ family physician, contended that 


245 


JAMES B. DUKE 


Durham should have a hospital for colored as well as 
white citizens. Mr. Duke’s barber, John Merrick; his 
butler, W. H. Armstrong, and his cook, Addie Evans, 
all talked with him about what their people were trying 
to do, 

The negroes needed a hospital, Mr. Duke concluded, 
more than they did a monument. That would be a 
memorial of practical use to them. Coming to the 
rescue, he and his sons made up the amount required, 
$13,000; a building was erected and the hospital 
opened in 1901. Later the Dukes gave $20,000 addi- 
tional. 

When, in 1921, a larger building was required, 
James B. and Benjamin N. Duke gave $75,000 of the 
$150,000 raised for the purpose, the colored people 
contributing $25,000, white residents a similar amount, 
and the city and county governments appropriating — 
$12,500 each. The Dukes, Mr. Watts and his son-in- 
law, John Sprunt Hill, donated a site of four acres, 
the old Stokes home, in the suburbs, and the negroes 
were given a hospital which is their refuge and pride. 

That is only one of many instances of the Dukes’ 
helpfulness. They were liberal contributors to colored 
charities, schools and every movement for the welfare 
of the race. 

In creating his Endowment, James Duke did not 
forget them. Funds were provided for black as well 
as white orphans, colored institutions will share in the 
funds for hospitals, and a share of the Endowment’s 
income, he specified, should go to the college for col- 
ored students at Charlotte. 

Booker T.-Washington wrote that the negro resi- 
dents of Durham seemed to be more prosperous, and 
he found fewer signs of poverty among them, than 
almost anywhere else in the South. “Of all the 

246 


AID TO COLORED RACE 


Southern cities I have visited,” he said, “I found here 
the sanest attitude of the white people toward the 
black. I never saw in a city of this size so many pros- 
perous carpenters, brickmasons, blacksmiths, wheel- 
wrights, cotton mill operatives, and tobacco factory 
workers among the negroes.” 

Even W. E. B. Dubois, violently denouncing 
Southerners in general for their treatment of his race, 
found no cause for complaint here. “There is in this 
small city,” he wrote, “a group of five thousand or 
more colored people whose social and economic devel- 
opment is perhaps more striking than that of any 
similar group in the nation.” 

If any one doubts whether the two races can dwell, 
side by side, in harmony; if any one contends that the 
negro “has no chance” in the South, let him go to 
Durham. There the negroes have not only excellent 
churches and schools, prosperous stores, barber shops, 
carpenter shops and small businesses; they own and 
run banks, building and loan associations and various 
other enterprises. 

They have a life insurance company with assets of 
nearly $2,000,000, policy reserves of over $1,800,000, 
and insurance in force of more than $41,000,000. 
Chartered in 1898, this has been in successful operation 
for nearly thirty years. In 1890 they organized a fire 
insurance company, with $200,000 capital and a larger 
surplus, which does business in five States, carrying 
risks amounting to $7,000,000. Some record for a 
people who only a generation ago emerged from 
slavery! 

In many of these enterprises John Merrick, the 
local barber, was the moving spirit, and it was largely 
through James Duke that he made his start. 

Going into Merrick’s shop for a shave, Mr. Duke, 


247 


JAMES B. DUKE 


impressed with the prosperous appearance of the place, 
remarked: 

“John, you have too much sense to be a mere barber. 
Why don’t you make money among your own people?” 

“But how, Mr. Duke?” 

“Well, for instance, why not establish an insurance 
company?” 

That seemed a practical idea. The negroes were 
strong for insurance. Hardly one of them, man or 
woman, but belonged to some “lodge” or fraternal 
order which promised death or sick benefits. But these 
were far from justifying their high-sounding names. 
The most that the majority accomplished was to insure 
an imposing funeral with long lines of mourners, af- 
fording the numerous “brothers” and “sisters” the 
opportunity of marching in full regalia. 

Merrick himself was a high officer and owned an 
interest in one of these societies—the “Royal Knights 
of King David,” which had lodges and members in 
seven States. 

But the “King David” order, with its knights and 
royalty, was not substantial enough for John. He de- 
sired a real insurance company, and in 1898, with half 
a dozen others, organized the North Carolina Mutual 
and Provident Association, each paying in $50, giving 
a cash capital of $350. But plain insurance, with no 
lodges or parades, did not seem to appeal to colored 
patrons. The other “investors” thought the scheme 
would never succeed. So Merrick and Dr. Moore 
bought out the other partners, reorganized the com- 
pany, and placed it on a solid basis. 

Beginning with small industrial insurance, they were 
soon writing straight life and endowment policies, and 
in five years the annual income increased from $900 
to $70,912. By 1911 the company owned its own 

248 


AID TO COLORED RACE 


home, a six-story building, had hundreds of agencies 
and was doing business in ten States. Not a bad show- 
ing for a company born of a chance remark in a barber 
shop. 

In the meantime, a bank had been established, with 
Merrick as vice president; and a fire insurance company 
organized. To aid in financing negro enterprises, in 
1921 the Durham Commercial and Security Company 
was organized. When, in 1924, leading colored men 
of various States organized the National Negro Finance 
Corporation, with Robert R. Moton, who succeeded 
Booker Washington at Tuskegee, as its president, 
Durham was selected as its center. 

The rise of the colored citizens of this Southern city 
to affluence and leadership, recounted in detail by Dr. 
Boyd, of Duke University, in his “Story of Durham,” 
in an inspiring record, significant not only to the South 
but to the nation. 

What made this possible? Enterprise, of course, no 
little genuine ability; but quite as much the spirit of 
tolerance that has prevailed; the disposition of resi- 
dents and leading business men to aid their colored 
fellow citizens in every worthy undertaking. 

Long ago, in 1890, Washington Duke expressed this 
in a message he sent, in place of a speech he had been 
invited to deliver, to a negro educational convention: 


“Five years more and I shall have lived three quarters of a 
century. Not long before I was born, Napoleon thundered 
at Waterloo, as the Old Guard melted itself before the 
hollow squares of the English army and England’s Iron Duke 
conquered the world’s most magnetic leader. Since then the 
destiny of nations has been changed. I have seen countries 
of Europe racked by terrible wars and here in our land I have 
witnessed the greatest revolution of them all—the emancipa- 
tion of your race. I have always had a friendly feeling to- 


249 


JAMES B. DUKE 


ward you, and now address you in the spirit of a friend, wish- 
ing if I can to help you overcome the hard conditions of your 
lot. 

“T have no doubt that each of you would like to be a suc- 
cessful man. It is right that you should feel so, for a proper 
ambition is God’s call to a higher life, but how shall that 
success be gained? Be industrious, do not always be looking 
for an easy, soft place. I have made more furrows in God’s 
earth than any man of forty years of age in North Carolina. 
And when you have made yourself industrious, you must be 
frugal. Establish it as a rule always to spend less than you 
make. I never closed a year’s work in my life without being 
happy in the knowledge that I was better off than I was when 
it began. Be sure to put away every week part of your earn- 
ings in a savings bank. And when people begin to find out 
that you are industrious and reliable they will offer you posi- 
tions of profit. Do honest work for your honest dollar, put 
it in your pocket, and at night when you lie down with it 
under your pillow the eagle on its face will sing you to sleep, 
because it knows you have earned it and can spend it properly. 

“Be men of honest, upright lives; support your churches 
and your schools; regard your minister as your best friend 
and your school teacher as your next; work honestly for your 
money and give some of it to help support these institutions, 
cease to rely upon outside help, for you must work out your 
own salvation. Ever since I was twelve years old I have been 
trying to make the world better by having lived in it. Let 
this be the rule of your lives. I have never failed to give 
freely to the support of the gospel; I have regarded it as a 
part of my life. If I am anything, if my life has been suc- 
cessful, if from small beginnings I have brought myself to a 
successful point in life, then I say to you that it was by fol- 
lowing these rules that I have gained it.” 


Mr. Duke’s sons had the same ideals, giving expres- 
sion to them in contributions to hospitals, orphan 
asylums, colleges and schools. The negro race has had 
no better or more sincere friends. 

250 


CHAPTER TWENTY 
Millions for Education, Hospitals, Churches and Orphans 


orty millions to education, charity and the relief 
RF of human suffering—a perpetual endowment 
that, increasing annually, will eventually reach eighty 
millions—was the princely gift which James Duke 
made to his native State and section. Large as the 
amount, the money was not a true measure of his 
munificence, for in creating this trust he gave himself, 
his organizing genius, the experience of a lifetime in 
affairs. 

“What will Mr. Duke do with his fortune?” was a 
question that had been discussed for twenty years. 
Here was the answer. 

The secret had been so well kept that the news of 
the largest benefaction the South has known came as 
almost a complete surprise. The announcement was 
made at his home in Charlotte, N. C., on December 8, 
1924. 

The millions set aside were devoted to purposes 
which were near his heart. Dreaming for years of 
creating in the South a university comparable with the 
leading institutions of the East and North, one that 
eventually might rank with Yale and Harvard, in car- 
rying out this project he inevitably turned to Trinity 
College, with which his family had been closely identi- 
fied for a quarter of a century. 

Colleges of other denominations, as well as the Meth- 
odists’, were provided for—Davidson, the Presbyterian 
college near Charlotte, which Woodrow Wilson once 
attended; Furman University, the Baptist institution 
at Greenville, S. C., and Johnson C. Smith University, 
the negro institution at Charlotte. 

Relief of sickness and suffering, bringing about im- 

251 


7 


JAMES B. DUKE 


proved health conditions and better means for the treat- 
ment of disease, appealed strongly to Mr. Duke. 
Knowing the scarcity of hospitals in that section, the 
handicaps under which they were laboring, he pro- 
vided for them liberally, allotting nearly one-third of 
the Endowment’s net income for this purpose. 

Ten per cent of the income was to be expended for the 


benefit of orphans, white and colored, in North and — 


South Carolina. Knowing of the trials of aged minis- 
ters as, worn out in service, they faced hardships in 
their declining years, and the struggles of the farmers 
to maintain proper houses of worship, he provided for 
all these—for building churches in sparsely settled 
rural districts, for pensioning superannuated preachers 
and aiding their widows and orphans. 

Devoted to various purposes, mainly in the region 
served by his power companies, his beneficences were 


so distributed that thousands would share in their 


benefits. 

In pursuance of a plan long contemplated, the initial 
announcement stated, he had determined to create and 
establish a trust for certain charitable purposes embrac- 
ing property having a value of at least $40,000,000, 
and which would include, among other securities, ap- 
proximately three-fourths of his holdings-in the 
Southern Power System, the income from which during 
the course of the next few years would aggregate ap- 


proximately $2,000,000 per annum and thereafter con- — 


siderably more, increasing with the growth of the 
country and of the power systems. 

The trust was to be administered by fifteen trustees, 
constituting a self-perpetuating body, the first includ- 
ing Mrs. Nanaline H. Duke, his wife; George G. 
Allen, of Hartsdale, N. Y.; William R. Perkins, of 
Montclair, N. J.; William B. Bell and Anthony J. 


252 














CHAPEL CAMPUS—CENTRAL BUILDINGS PLANNED FOR DUKE UNIVERSITY 





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MILLIONS FOR EDUCATION 


- Drexel Biddle, Jr., of New York; Walter C. Parker, 
of New Rochelle, N. Y.; Alex. H. Sands, Jr., of Mont- 
clair, N. J.; William S. Lee, Charles I. Burkholder, 
Norman A. Cocke and Edward C. Marshall, of Char-. 
lotte, N. C., and Bennette E. Geer, of Greenville, S. C. 

Directed to expend $6,000,000 in acquiring land and 
erecting and equipping buildings for the establishment 
of an institution of learning in North Carolina to be 
known as Duke University, the trustees were empow- 
ered, if Trinity College saw fit to adopt that name, to 
spend that sum in expanding and extending Trinity. 

To increase the trust estate, twenty per cent of the 
income was to be withheld and added to the principal 
until such additions aggregate $40,000,000, the re- 
mainder of the income to be expended and distributed 
as follows: 

Thirty-two per cent to Duke University; thirty-two 
per cent for maintaining and securing hospitals, pri- 
marily in North and South Carolina, on the plan of 
paying to the hospitals a sum not exceeding $1 per free 
bed per day occupied free, and in addition building and 
equipping hospitals; ten per cent for the benefit of 
white and colored orphans in the two States; six per 
cent for assisting and building Methodist Episcopal 
churches in rural districts of North Carolina; four per 
cent for the same purpose in South Carolina. 

Two per cent was allotted for pensioning superan- 
nuated Methodist preachers and the widows and or- 
phans of deceased ministers in North Carolina; five per 
cent to Davidson College, five per cent to Furman 
University, four per cent to Johnson C. Smith Uni- 
versity. 

On his return to Somerville, N. J., in formally 
turning over the endowment fund to the trustees, Mr. 
Duke, in probably the longest personal statement he 


253 


JAMES B. DUKE 


ever made, set forth his ideals and purposes in making 
this endowment, which are given in full in the Trust 
Indenture published as an appendix to this book. 

In the development of water power in the Carolinas, 
he had observed, he said, how utilization of such a 
natural resource which otherwise would run to waste 
both gives impetus to industrial life and provides a safe 
and enduring investment for capital, and his ambition 
was that the revenues of such developments shall ad- 
minister to the social welfare as their operation ad- 
ministers to the economic welfare of the communities 
they serve. With these views in mind, he recom- 
mended the securities of the Southern Power System 
as the prime investment for the funds of the Endow- 
ment, not to be changed except in response to the most 
urgent and extraordinary necessities, and requested the 
trustees to see to it that at all times these companies be 
managed and operated by the men best qualified for 
such a service. 

Duke University had been selected as one of the 
principal objects of this trust because he recognized that 
“education, when conducted along sane and practical 
lines as opposed to dogmatic and theoretical lines, is, 
next to religion, the greatest stabilizing influence.” 
Requesting that this institution secure for its officers, 
trustees and faculty men of such outstanding character, 
ability and vision as will insure it a place of real leader- 
ship in the educational world, he advised that great 
care and discrimination be exercised in admitting as 
students only those whose previous records show char- 
acter, determination and application evincing whole and 
real ambition for life. 

Advising that the University courses be arranged first 
with special reference to the training of preachers, 
teachers, lawyers and physicians, “because these are 
most in the public eye and by precept and example can 


254 









CHAPEL TOWER AND ADMINISTRATION BUILDING INTERIOR OF CHAPEL, DUKE UNIVERSITY 











MILLIONS FOR EDUCATION 


do most to uplift mankind,” he stressed as next in im- 
portance instruction in chemistry, economics and his- 
tory, “especially the lives of the great of earth, because 
I believe that such subjects will most help to develop . 
our resources, increase our wisdom and promote human 
happiness.” 

Hospitals had been chosen as another of the princi- 
pal objects of his benefaction because he recognized 
that they have become indispensable institutions, not 
only in ministering to the comforts of the sick, but in 
increasing the efficiency of mankind and prolonging 
human life. “So worthy do I deem the cause and so 
great do I deem the need,” he said, “that I very much 
hope that the people will see to it that adequate and 
convenient hospitals are assured in their respective com- 
munities, with especial reference to the poor who are 
unable to defray such expenses of their own.” 

Orphans were included in an effort to help those 
who are most unable to help themselves, a cause in 
which he felt all good citizens should have an abiding 
interest. “While, in my opinion,” he commented, 
“nothing can take the place of the home and its influ- 
ence, every effort should be made to safeguard and 
develop these wards of society.” 

Lastly, he made provision for what he considered 
“a very fertile and much neglected field for useful help 
in religious life”—assisting aged ministers and the 
widows and children of clergymen, and aiding in the 
building and maintenance of churches in rural districts. 
“Indeed, my observation of the broad expanse of our 
territory makes me believe,” he said, “it is to the rural 
districts that we are to look in large measure for the 
bone and sinew of our country.” 

Urging the trustees to administer well, within the 
limits set, the trust committed to them, he concluded: 

“From the foregoing, it will be seen that I have en- 


255 


JAMES B. DUKE 


deavored to make provision in some measure for the 
needs of mankind along physical, mental and spiritual 
lines, largely confining the benefactions to those sec- 
tions served by this water-power development. I 
might have extended this aid to other charitable objects 
and to other sections, but my opinion is that so doing 
would probably be productive of less good by reason 
of attempting too much.” 

Since early manhood Mr. Duke had had in mind the 
devotion of his fortune to the benefit of others, and in 
later years it was his chief concern. The power systems 
he had created provided the machinery for a constant 
flow of dividends. What were the best purposes to 
which it could be devoted? What did the Carolinas 
need most? 

Having very clear ideas as to what should be done, 
he wished to know precisely what conditions were and 
how they could be remedied, how his funds could be 
expended so every dollar would count. 

How many orphans are there, and how can they best 
be cared for? What is needed in hospitals? How can 
we help build churches in country neighborhoods? 
How many aged ministers are there who need aid? 
What will be required to build and maintain the kind 
of university we desire? 

Surveys were made, statistics compiled, the field 
gone over thoroughly. Experts were consulted, and he 
and his personal staff studied for months the questions 
involved. The entire plans were put on a business 
basis, figured out to the last decimal. He would not 
be content until he felt sure they would work out in 
practice and function efficiently regardless of the lapse 
of time or changing conditions. No easy task for all 
concerned. 

“This is a harder job than I thought it would be,” he 


256 


“ 


MILLIONS FOR EDUCATION 


remarked. “I’m beginning to think it is almost as dif- 
ficult for a man to give away his money rightly as it is 
to make it.” 

At last, satisfied with the plans, one part of his am- 
bition was realized—to do something great for hu- 
manity and his own people while he was yet alive. The 
Indenture creating this trust is in itself a notable docu- 
ment, evidencing the care with which he provided for 
every detail. The original endowment was but the 
beginning. Mr. Duke was continually thinking of 
other things that might be done. His plans were con- 
tinually expanding. 

Physicians being needed as urgently as preachers and 
lawyers, and North Carolina having no medical college 
of the first rank, Mr. Duke determined to establish one. 
At his home in Charlotte, his associates were working 
with him on the methods of carrying into effect the 
provisions of the Endowment. Sending for Dr. Few, 
president of Trinity, he asked question after ques- 
tion as to the establishment of a medical school and 
hospital, cost of buildings, operating expenses, and what 
such an institution could accomplish. Bequeathing in 
his will $10,000,000—$4,000,000 for buildings, 
$6,000,000 for endowment—to create at Duke Uni- 
versity the largest medical school south of Baltimore, 
later a codicil was added, leaving $7,000,000 additional 
to the university for other purposes. 

By these and other donations and bequests the 
amount originally given in the Endowment was greatly 
increased. Through the cumulative provisions of the 
trust, the original fund will, in time, be doubled, and 
the total of Mr. Duke’s benefactions will eventually 
be considerably more than $100,000,000. Only two 
men in our history—John D. Rockefeller and Andrew * 
Carnegie—have given more. 


257 


CHAPTER TWENTY-ONE 
As He Came to the End of His Days 


TRICKEN with severe illness in the summer of 1925, 
Mr. Duke suffered an almost complete physical 
breakdown. Unable at first to discover the cause, 
physicians finally diagnosed it as pernicious anemia, a 
wasting disease for which medical science has, as yet, 
found no cure. 

His strength gradually failing, in July he was com- 
pelled to take to his bed, and ill and suffering, for 
months was confined to his room, under the constant 
care of doctors and nurses. But they could not keep his 
mind from personal and business affairs. 

At “Rough Point,” his Newport estate, when his 
illness became serious, he remained there for several 
weeks, being brought later to his New York residence, 
No. 1 East Seventy-eighth Street. 

In the South the severest drought on record pre- 
vailed. Shortage of water in the Catawba and other 
rivers curtailed the service of the power plants. Fac- 
tories were shutting down or running on reduced time, 
throwing workmen out of employment, and seriously 
affecting towns and industries. 

The streams which drove his turbines had for gen- 
erations furnished an abundant supply of water. 
Years might elapse before their flow would fail again, 
but he was determined to provide against that con- 
tingency. Large steam plants must be built, to supple- 
ment those already erected, and supply ample elec- 
tricity whenever the water powers failed. 

Sites were selected, engineers rushed the making of 
surveys and drawings, millions of additional capital 
were provided, and preparations made for construction 
on an extensive scale. 

258 


esis 


THE END OF HIS DAYS 


On his last visit to Charlotte, early in July, Mr. 
Duke remarked that the drought seemed providential, 
coming as it did when he was yet alive, and could de- 
vise means of meeting such emergencies in the future: 

As he lay ill his mind constantly turned to the water- 
power situation, and the steps that were being taken to 
meet it. The doctors had told him he must not be 
disturbed by any thought of business, but this was too 
important. Noticing one night that he was wide awake 
hours after he should have been asleep, his attendant 
asked what was the trouble. 

“Please don’t disturb me,” he said; “I’m building a 
steam plant down South.” 

Unable to rest until assured that this undertaking was 
being carried out to his satisfaction, engineers and ofii- 
cials were summoned. Gathering them around his bed- 
side, he inspected the blue-prints, checked up the es- 
timates, went into all the details of construction. Satis- 
fied with the plans, he urged them to press the work 
to completion. 

He was even more interested in the progress of 
Duke University, and every move in connection with 
it had to be reported to him. Now and then, thinking 
of some new feature that could be introduced, some 
improvement that might be made, he would imme- 
diately give orders that it be done. 

Restless at a late hour, he seemed impatient at the 
efforts of his attendant to make him more comfortable. 
Rising in bed, and motioning her away, he said: “Nurse, 
don’t disturb me now; I am laying out the University 
grounds.” 

Eleven days before his death, he sent for Mr. Allen. 
He seemed to be perturbed, laboring under some com- 
pelling emotion. 

“Allen,” he explained, “I have not provided suffi- 


259 


JAMES B. DUKE 


cient funds for carrying out the complete plans I have 
in mind for the University. I want to arrange to give 
an additional $7,000,000 to complete the building 
program.” 

His legal adviser was called in, and a codicil was 
added to his will, providing for this additional bequest. 

Very weak at the time, following an attack of pneu- 
monia, he seemed to be improving until suddenly a re- 
lapse occurred. Two days before his death he sank 
into a coma from which he never revived, passing 
away at six o’clock on Saturday evening, October 10, 
1925. 

The simple funeral service held at his New York 
residence the following Monday, conducted by Rev. 
Dr. Raymond L. Forman, pastor of St. Paul’s Metho- 
dist Church, was attended only by members of the 
family and intimate friends. Following the solemn 
ritual of the Methodist Church, the minister read John 
G. Whittier’s poem, “Eternal Goodness,” whose con- 
cluding verses voice humanity’s hope and trust: 


“T know not what the future hath 

Of marvel or surprise, 

Assured alone that life and death 
His mercy underlies. 

And so beside the silent sea 
I wait the muffled oar; 

No harm from Him can come to me 
On ocean or on shore. 


“TI know not where His islands lift 
Their fronded palms in air; 
I only know I cannot drift 
Beyond his love and care. 
And thou, O Lord, by whom are seen 
Thy creatures as they be, 
Forgive me if too close I lean 
My human heart on thee.” 


260 








DUKE UNIVERSITY STUDENTS—THE GUARD OF HONOR AT ITS FOUNDER’S FUNERAL 


i 


THE END OF HIS DAYS 


There was no sermon or eulogy, but in his fervent 
prayer Dr. Forman gave thanks for the life of this 
good man who, piling up his material mountain, had 
climbed up to its summit and there, viewing life as a 
seer, in a prophetic vision had seen the future need, and 
“out of a wise mind and compassionate heart invested 
his goods to serve the generations yet to come, in 
Christ’s name.” Wherefore “a countless host of 
friends in the North and all the Southland mourned 
the loss of a great benefactor.” 

Reading the twenty-third Psalm and the fourteenth 
chapter of St. John, the minister concluded with 
Elberton’s hymn: 


“Now the laborer’s task is o’er, 
Now the battle day is past, 
Now upon the farther shore, 
Lands the voyager at last. 
Father, in Thy gracious keeping 
Leave we now Thy servant sleeping.” 


Taken to North Carolina for interment, his body lay 
in state at Duke University, students, members of the 
faculty, friends and employees filing reverently by the 
bronze casket. 

The funeral, held on the morning of October 13th, 
was the largest Durham had ever known. Thousands 
lined the streets and gathered around Duke Memorial 
Methodist Church, which the brothers had erected, and 
where the services were held. A blanket of golden 
roses, ferns and orchids covered the casket. The 
chimes in the tower rang solemnly. Mr. Duke’s 
favorite hymns were sung, “How Firm a Foundation,” 
“Abide With Me” and “Nearer, My God, To Thee.” 
Rev. Dr. Edmund D. Soper, dean of the School of 
Religion, read the service and offered a brief prayer. 
The honorary pall-bearers were the trustees of the 

261 


JAMES B. DUKE 


Duke Endowment, the men he had selected to carry on 
the work planned for the future. 

Fourteen hundred students of Duke University 
formed a guard of honor from church to cemetery, 
bearing wreaths of flowers which they banked around 
the tomb—an impressive scene. With the simple, 
solemn words of the burial service the body was placed 
in the Duke mausoleum. James B. Duke was at rest 
beside his father. 

Tributes to his memory came from many States and 
countries. Premier Taschereau, of Quebec, declared 
that Mr. Duke’s death was “an irreparable loss” to the 
Canadian province. Colonel John H. Price, associated 
with him in his Northern power developments, spoke 
of the great things he had done for Canada. All parts 
of the Carolinas joined in honoring his memory. 

Mr. Duke’s career, the New York Herald Tribune 
stated, “had all those characteristics which in the public 
mind are now associated with captains of industry. The 
wealth he piled up he looked upon as a means of public 
service, as the American fortune builder nearly always 
does. To his native state he has been a benefactor in a 
double sense in that after contributing largely to its 
growth and prosperity as a manufacturer he has turned 
back so large a share of his wealth to give it the trained 
leaders in the learned professions of whom it stands in 
need. Mr. Duke was a thorough-going American—a 
constructive factor in business and a broadminded citi- 
zen who had won both local and national respect.” 

Terming him “America’s Tobacco King,” the New 
York World said: 


“The late James B. Duke’s fortune was built by business 
enterprise upon a scale unique in the South. The family of 
which he was the ablest member began establishing the Pied- 


262 


THE END OF HIS DAYS 


mont tobacco industry in the same post-war years in which 
young Carnegie in Pittsburgh was revolutionizing the steel 
business; in which Rockefeller in Cleveland was organizing 
the Standard Oil; in which Frick was making Connellsville 
the nation’s coke center, in which Agassiz and Higginson were’ 
building the Michigan copper industry. Duke consciously took 
Rockefeller for his model. He saw no reason why the to- 
bacco business could not be organized with the same boldness 
as the oil business. 

“The qualities of shrewdness and energy that stamped these 
Northern men marked Duke as well. He was quick to seize 
opportunity in such shapes as the pasteboard cigarette box and 
the cigarette-rolling machine; he saw the value of nation- 
wide advertising; and he pushed his consolidation schemes 
until the Government had to break up the trust he headed. 
More than any other man he made America a nation that 
smokes cigarettes by the hundred million. Having given the 
South a tobacco industry it had never dreamed of, he turned to 
other fields of Southern development. 

\ “Indeed, Duke will be longest remembered as one of the 
builders of the New South and especially of the New North 
Carolina. It would be hard to name a rich American who 
has done so much to re-create his native State.) He gave $40,- 
000,000 to a university which he hoped would yet rival 
Harvard and Yale. He led in the development of its water- 
power and helped make it second only to Massachusetts in the 
number of its cotton spindles. North Carolina, recently one 
of the poorest and most backward of States, is now one of the 
busiest and most progressive. Duke may yet stand as the 
first representative figure in a great new Southern industrial 
era.” f 


~ These were examples of hundreds of editorial com- 

ments, in every part of the country. 

. Filed soon after his death, his will revealed the 

careful, thorough way in which he had planned the 

devisal of his estate. Liberal provision had been made 

for his wife and daughter, as well as other relatives. 
263 


JAMES B. DUKE 


One unusual feature was the creation of “The Doris 
Duke Trust,” to which was assigned more than 125,000 
shares of the Duke Power Company, valued at many 
millions, and certain other securities. Two-thirds of 
the income is to be paid to his daughter and only child, 
Doris, and one-third to his nieces and nephews and 
their descendants, the trust to continue until twenty-one 
years after the death of the last beneficiary now living, 
the principal then to be distributed. In case neither 
these nor their lineal descendants are surviving at that 
time, the funds and properties are to go to the Duke 
Endowment. 

Another trust was created, with the same trustees 
and practically the same powers, setting aside one-third 
of the residuary estate, the income to go to his daugh- 
ter, one-third of the principal to be paid to her when 
she is twenty-one years of age, the second third when 
she has attained twenty-five, and the remainder when 
she is thirty years old. Two million dollars was left to 
his cousins and other kin, so that even his most distant 
relatives would be included. In addition, associates, his 
office staff, servants, those who worked with and for 
Mr. Duke, were left various sums, none being for- 
gotten. 

The original will, executed at Somerville, N. J., on 
December 11, 1924, made a specific bequest of 
$10,000,000 to the medical school and hospital at Duke 
University, and provided that the residue of the residu- 
ary estate go to the Duke Endowment on the same 
terms as the original trust. But the codicil, executed 
on October 1, 1925, provided that $7,000,000 of this 
be used “in building and equipping Duke University 
and acquiring and improving property necessary for the 
same.” Ninety per cent of the income, revenues and 
profits accruing from the remainder were to be de- 


264 


THE END OF HIS DAYS 


voted, it was specified, to maintaining and securing hos- 
pitals, and ten per cent to the University. 

His last will and testament was as characteristic of 
Mr. Duke as any act of his life. Both in his Endow- . 
ment and bequests |Mr. Duke sought to provide for 
activities which were not being and probably would not 
be adequately supported by others. One imperative 
need was for better medical service, especially in rural 
regions, which he sought to supply in two ways: First, 
by establishing a medical school of high grade for 
training physicians and nurses; second, by aiding exist- 
ing hospitals and encouraging the building of new 
ones. 

Cities in the South, as in other parts of the country, 
possess excellent hospitals and a plenitude of physi- 
cians. But many counties have no hospital facilities 
whatever, and the passing of the country doctor has 
deprived sparsely settled sections even of the services 
they previously enjoyed. | 

Dr. W. S. Rankin, director of the Hospital and 
Orphan Section of the Endowment and who was previ- 
ously secretary of the North Carolina State Board of 
Health, has gone through that entire region, preaching 
the gospel of hospitalization and better medical service. 

Too many physicians in urban centers, Dr. Rankin 
points out, tends to discourage professional understand- 
ing, sympathetic purposes and codperative enterprises, 
and encourages high charges, split fees, over-speciali- 
zation and excessive references from one specialist to 
another. Too few physicians in rural areas means in- 
adequate medical care, unrelieved suffering, untimely 
death. 

A county with a hospital and twelve doctors, it is 
contended, can enjoy far better medical service than 
one with twenty doctors and no hospital, and the poten- 


265 


JAMES B. DUKE 


tial saving of $40,000 a year which would be paid the 
eight additional physicians would enable that county to 
build and maintain a hospital. 

The Duke Endowment cannot assist individual pa- 
tients or physicians. Nor can it relieve a town or com- 
munity of obligation to care for its sick and suffering; 
but it can assist materially communities which assume 
their share of the responsibility. First, the Endow- 
ment pays hospitals one dollar a day for each charity 
patient treated free of cost in a free bed, the allot- 
ments applying in proportion to the need. Second, the 
surplus, after such charity payments, may be used to 
aid in building and equipping hospitals. 

Ordinarily the trustees, it is estimated, will have 
available $700,000 or more annually, $400,000 for 
maintenance in assisting charity cases, and $300,000 for 
construction and equipment. With the cumulative 
growth of the fund’s capital the amount will continu- 
ally increase. 

Observing the interest already aroused, health autho- 
rities are convinced that through the Duke Endow- 
ment there will, in time, be wrought a decided im- 
provement in medical service throughout a wide region. 

_No less potent is its influence in the upbuilding of 
country churches. The Rural Church Section, under 
the direction of Rev. J. M. Ormond with headquarters 
at Duke University, has a building as well as a main- 
tenance fund. Stimulating congregations to do things 
for themselves, intelligent direction and inspiration are 
accomplishing more than mere monetary assistance ever 
could, and this policy seems likely to bring about a 
transformation in the churches themselves as well as 
in the buildings that house them™) 

Empowered to contribute as much as fifty per cent 
of the cost of an improvement, the trustees find that 

266 


THE END OF HIS DAYS 


the average required has been but a fraction of that 
proportion. In fact some of the smallest contributions 
have yielded large results. 

Standard types of churches have been designed, a _ 
model one providing for four rooms—one for wor- 
ship, the main auditorium, and three for Sunday School 
departments. Regarding the Sunday School as the key- 
note of church effectiveness, these schools are systema- 
tized in three types—“A,” graded in seven departments 
from beginners to adults; “B,” having five depart- 
ments; and “C,” with three departments. Assisting 
forty-four churches which were below the minimum to 
reach the “C” type requirement was accomplished by 
the Duke fund in 1926 at a cost of only $40,000. 

Encouraging consolidation of churches is another 
important activity. In one section there were four 
Methodist churches within a radius of three miles, all 
ona good road. Bringing them together replaced three 
weak, struggling units with one strong congregation 
and a creditable structure. Similar instances have oc- 
curred time and again. 

Churches isolated by changes in roads and communi- 
ties are being rebuilt in more convenient locations. At- 
tractive brick and stone structures are replacing weather- 
board houses. The old “plank” churches, like the log 
cabins they succeeded, are giving way to modern struc- 
tures. Excellent schools, good roads, scientific farm- 
ing have wrought revolutionary changes in rural life, 
and the church must keep pace with them. 

“I see no reason why, within fifteen years, we should 
not reconstruct the churches in rural North Carolina,” 
a leader in this movement remarked. 

\Giving for a decade or more before his death 
$25,000 annually to Carolina country churches, Mr. 
Duke also for many years contributed, through Dr. 

267 


JAMES B. DUKE 


Few, president of Trinity, thousands of dollars to aid 
superannuated clergymen and the widows and orphans 
of ministers. | Now this fund is enlarged and at Christ- 
mastide there goes out to each of these beneficiaries a 
welcome check, accompanied by a sympathetic letter, 
bringing joy to the homes of these veteran itinerants. 

Last, but not least, the orphanages, children’s aid 
societies and organizations which care for the fatherless 
all share in the benefits of the Endowment. Convinced 
that this was one field’ in which others could be de- 
pended upon to do their full share, Mr. Duke’s earnest 
hope was that not one of these little ones should suffer 
for lack of sustenance and care. | 


268 


CHAPTER TWENTY-TWO 


Bringing into Being a Great University 


n a broad plateau in the rolling, wooded lands 
O west of Durham, not far from the campus where © 
Trinity College has stood for thirty-five years, will 
soon be rising more than a half-mile of imposing build- 
ings—administrative structures, study and lecture halls, 
dormitories, chapel, library, auditorium, hospital—all 
that is required for the instruction, accommodation and 
recreation of students. 

In what was almost an untouched forest, architects, 
landscape gardeners, engineers, stone-masons, brick- 
layers—an army of workmen—will be engaged for 
years in preparing the grounds and carrying out this 
extensive project. Fora university, perhaps the largest 
ever created at any one time, is coming into being. 

Over four thousand acres are included in the site, 
and the buildings of a dozen colleges could be placed 
in this vast campus. Diversified grounds, studded with 
trees, afford distinctive sites and attractive settings. 
There is room and to spare for athletic fields, golf 
links, baseball diamonds, football ovals, tennis courts, 
running tracks, without disturbing the park-like char- 
acter of the tract, which stretches for miles through the 
suburbs. 

Eleven buildings of Georgian type, red-brick 
trimmed with marble, are under construction on the 
former Trinity campus, grouped around a quadrangle. 
But these compose only one unit, a fraction of the in- 
stitution—that for the Co-ordinate College for 
Women, to which will be devoted also the present 
Trinity College buildings, 

The University proper, of which Trinity is the 

269 


JAMES B. DUKE 


undergraduate college for men, will be located more 
than a mile away, linked with the women’s college by 
a winding boulevard. Here will stand the schools of 
science, law, chemistry and physics, medicine and the- 
ology, the dormitories and numerous buildings required 
to house hundreds of students and provide for the 
faculty and various departments. 

Seeking the most fitting type of architecture, Horace 
Trumbauer, the Philadelphia architect selected by Mr. 
Duke to design these structures, made extensive studies 
of the best examples of collegiate architecture both in 
this country and abroad. As a result the Gothic of 
English colleges was adopted for the principal group, 
not only by reason of its appropriateness for a uni- 
versity but as best suited to the rugged landscape. In 
this Mr. Duke was entirely in accord. Work was be- 
gun on the preliminary plans, and at last, after many 
months of preparation, the final studies have been com- 
pleted, ready to be embodied in physical form. 

A Gothic chapel whose tower, inspired by that of 
Canterbury Cathedral, rising to a height of 240 feet, 
will be the most prominent figure of the landscape, 
will be the central feature. To the right and left, ona 
three-quarter-mile eminence, the other structures will 
be placed. A deep ravine, now covered with sedge- 
brush and scrub-pine, extending along the entire front 
of the plateau, forms a natural basin for a lake. With 
fountains and cascades on either slope, encircled by a 
parkway lined with flowers, shrubs and trees, this can 
be transformed into a scene of rare beauty. 

Along the lines that radiate from the center, on what 
architects term the subordinate axes, will stand the 
principal structures, in related groups, placed in ap- 
propriate settings. All of the same general type of 
architecture, constructed in one continuous operation, 

270 


CREATING A UNIVERSITY, 


this must result in a harmony that could hardly be at- 
tained under other conditions, 

Viewed from the front, to the left of the Chapel 
will stand the Auditorium and class-room structures, 
the Union Building and dormitories; on the right the © 
Religious Education Building, Library, Law, Chem- 
istry, Botany and Zodlogy, and Physics buildings and 
the Medical School and Hospital. 

Many details are yet to be determined; plans may be 
changed to meet conditions, necessarily modified here 
and there to suit requirements, but these have advanced 
so far that an approximate picture can be given of the 
construction proposed. 

A strikingly beautiful interior is planned for the 
Chapel, the nave, 80 feet high and 35 feet wide, ex- 
tending 132 feet from the entrance to the chancel arch, 
and the total length, including the chancel, being 174 
feet. Aisles will extend on either side of the nave, 
and large clerestory windows light the chancel. With 
vaulted ceiling, the interior will be of cut stone, illumi- 
nated by stained-glass windows made in the natique 
manner. 

The Auditorium, in a building of its own near the 
Chapel, is designed to seat fifteen hundred, with a 
stage equipped for drama or other entertainments. 

The Union, the center of social life, will comprise 
a student lounge, dining rooms for students and faculty 
as well as visitors, and meeting-rooms for University 
organizations. A large room for receptions and other 
social functions will occupy a considerable part of the 
second floor; and the post office, college store, barber 
shop, bowling alleys, kitchen and service rooms will be 
located in the basement. Divided into houses for one 
hundred students each, with commons room and a 
suite for a matron or professor in each, accommodations 


271 


JAMES B. DUKE 


for twelve hundred are provided in the dormitories 
now to be erected. 

The School of Religion, at the right of the Chapel, 
which with the Class-Room Building on the opposite 
side, will form a fore-court of which the memorial 
tower will be the central feature, will contain a chapel 
of its own, thirty by sixty feet, seating two hundred. 

Adjoining and communicating with this will be the 
Library, its entrance through a tower at the intersection 
of the two main quadrangles. With one room of ex- 
ceptional length, 32 by 117 feet, on the first floor, the 
library will contain periodical and map rooms and nu- 
merous studies. The main reading room, 32 by 105 
feet and 45 feet high, on the second floor, will com- 
municate with the stack-room, which, extending 
through all floors, is designed for a capacity of 800,000 
volumes. Catalogue and delivery rooms, as well as 
administrative offices, are conveniently located. Grad- 
uate reading and seminar rooms will occupy most of the 
third floor, with numerous cubicles for special study. 

One feature of the Law Building, adjoining, will be 
a library of 200,000 volumes capacity. A museum and 
lecture hall are included in the designs for the Chem- 
istry Building, which will be mainly occupied by labora- 
tories for chemical research. Facing this will stand 
the Botany and Zodlogy structure, and near by the 
Physics Building, each of these including a library of 
its own as well as class, study and lecture rooms and 
instructors’ offices. 

The Medical School and Hospital, terminating the 
east end of the campus and designed as a single group, 
have been planned on the most advanced lines, includ-_ 
ing a hospital of three-hundred-bed capacity, with 
every facility for the care of patients and the training 
of nurses as well as medical students. 

272 


CREATING A UNIVERSITY, 


Of stone construction, the roofs of slate, the build- 
ings will be fireproof throughout, heated by steam from 
a central plant. To the southwest will be located the 
gymnasium, football field and stadium. The serpen- 
tine boulevard, a mile and a half in length, will afford 
a convenient connection with the Trinity campus. 

Five years or more will be required, experts esti- 
mate, to construct and equip these buildings, ten years 
to convert the tract into the ideal landscape designed 
and complete all the construction work that is contem- 
plated. Not a brief period, but only a day in the life 
of an institution like this. 

Acres of foundations are to be dug; millions of brick 
baked and laid; endless stretches of timber sawed and 
planed for floors and ceilings, miles of walls plastered 
and decorated, rooms built by hundreds. Roads are to 
be graded and surfaced, wide stretches of lawns and 
hillsides sodded, forests of trees, myriads of shrubs and 
flowers planted. A mammoth undertaking, this crea- 
tion of a university “to order.” 

No business enterprise ever more thoroughly en- 
gaged Mr. Duke’s genius and energy than this child 
of his dreams. Seeking an adequate site, he first 
planned to extend the Trinity campus, buying sufficient 
land adjacent for the larger institution. But a high 
price was demanded, far more, in his opinion, than the 
land was worth. He refused to pay it. Duke, the 
owners thought, “had to have this tract,” was rich 
enough to pay any amount, and eventually would be 
compelled to accept their terms. 

While the eyes of the town were on this property, 
his advisers were seeking another site. There was 
plenty of undeveloped land near the edge of the city. 
The largest tract, untenanted, most of it never culti- 
vated, belonged to a man who, as long as he lived, re- 


273 


JAMES B. DUKE 


fused to sell a single acre. After his death, the heirs 
not being able to agree, the courts ordered the property — 
sold. Prof. Robert L. Flowers, vice president and 
treasurer of the University, who was acting for Mr. 
Duke in the negotiations, was convinced that this tract 
and the other acreage desired could be acquired without 
paying an excessive price. Mr. Duke was rather dubi- 
ous about this, remarking that, once the owners learned 
any particular area was being considered, the prices 
would go sky-high; but he finally told Prof. Flowers 
to “go ahead and see what you can do.” 

Acting through local real estate dealers, pledged not 
to disclose an inkling of the transactions, one piece of 
property after another was bought, and the entire com- 
munity was surprised when announcement was made 
that all the land needed for the university, thousands 
of acres, had been acquired. 


| 


Mr. Duke was delighted. A site far more extensive — 


and better adapted to the purpose than that first con- 
templated had been obtained, and at a fraction of what 
the owners demanded for the other property. Mean- 
while, impatient to “get started,” he was formulating 
plans for buildings, developing grounds, clearing the 
way for construction. Particularly interested in land- 
scaping, regarding Frederick Law Oimsted as the 
country’s leading landscape architect, he entrusted that 
part of the undertaking to the Olmste -, making 
numerous suggestions which they were quick to adopt. 

Tramping over the property, penetra*’ 1g into every 
nook and corner of it, he consulted with architects, 
builders, landscape experts, learning their ideas and 
giving them his own, visualizing not only the concep- 
tion as a whole, but the most technical details. 

The buildings must not only be well designed and 
solidly constructed, but the most attractive that could 


274 








MEDICAL SCHOOL AND HOSPITAL, ONE OF THE MAJOR GROUPS OF UNIVERSITY BUILDINGS 




















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CREATING A UNIVERSITY 


be produced. “I am looking to the future,” he said, 
“how they will stand and appear a hundred years from 
now.” Considering what was the best stone to use, the 
comparative merits of the leading varieties were tested, 
from New England granite to Georgia marble—ap- 
pearance, durability, tensile strength, cost of material, 
quarrying and transportation. Not satisfied with these 
technical comparisons, he insisted on viewing each va- 
riety in finished form, to “see how it would look.” 

Carloads of various specimens were bought, trans- 
ported to Durham, and walls of the most promising 
materials erected on the college grounds. The most 

attractive proved to be from New England, costly, the 
long haul entailing heavy expense for transportation. 

Mr. Duke believed that stone quite as good could be 
found nearer than this, and had Professor F. C. Brown 
and others investigate the neighboring deposits. Pro- 
fessor Brown discovered in Orange County, only a 
few miles away, a stone that in strength and coloring, 
as well as other qualities, seemed to compare well with 
any that had been considered. Options on the quarries 
were secured, and several carloads taken to the college 
and erected beside the other test walls. 

To the surprise of architects and builders, the local 
stone proved superior to that from distant regions. 
Attractive in appearance, with soft touches of color 
that relieved the sameness of gray granite, it proved 
precisely what was sought. Highly pleased, Mr. Duke 
bought the entire deposit and surrounding property, 
presenting the university with a quarry of its own. 
With an almost inexhaustible supply of stone within 
easy reach there will be an immense saving in freights 
as well as in the cost of the thousands of tons required. 

Creating a real university, however, means more 
than material construction, as some educators were 


275 


JAMES B. DUKE 


ready enough to exclaim and editors not slow to point — 
out when the Duke Endowment was announced. One ~ 
writer in The Nation, reciting that Oxford, Cambridge, 
Bologna, Salamanca and Paris began far less grandly, 
went so far as to say: 


“Mr. Duke in his naive way believed that he could build a 
great university as he could build a factory—by going out and 
buying the brick and stone, the machinery and tools, and the 
workmen to operate them. He forgot that he was dealing in 
the most elusive commodity in the world. He could no more 
create ideas in this wholesale fashion than he could later create 
a market for them: Thus he started to build his university 
at the wrong end. He was distressed because North Carolina 
had no great school; he did not stop to discover the reason for 
this lack. He assumed that it was want of money—and of 
money he knew he had plenty. But a careful examination of 
the ideas which have come out of North Carolina in the last 
two hundred years might have told him more. If North 
Carolina had no great university, it might have been that she 
had no desire for one. Now that one has been wished on her, 
it remains to be seen what she will do with it.” 


These captious critics might have saved their breath 
and ink. No one realized more keenly than did Mr. 
Duke himself that, without high ideals, competent in- 
structors and a broad, progressive policy, his effort and 
expenditure would be in vain. Costly buildings and 
extensive grounds were only the setting, large endow- 
ment the means for the institution he planned. Far 
more important was the human product. 

“Get the ablest men, no matter where they come 
from, for the heads of the different departments,” his 
trustees were instructed. Urging them to pay more 
attention to the faculty than to buildings or any other 
material thing, he said: “Get the best executives and 
educators, no matter what they cost. I want Duke to 

276 














TYPICAL DORMITORY GROUP—ARCHITECT’S DESIGN 














THE UNION CLOISTERS—DUKE UNIVERSITY 





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CREATING A UNIVERSITY, 


be a great national institution, ranking with Harvard, 
Yale or any other university in the country.” 

Quality, not quantity, was his ideal—not mere num- 
bers, but an earnest student body, developed by thor- 
ough training. Having no sympathy for the thousands 
who go to college to “have a good time,” devote their 
time to sports and social affairs and “edge through” 
with no more study than is required to attain degrees, 
he frankly told his advisers that he did not wish Duke 
University cluttered up with such idlers. 

“Unless a boy has ambition and a determination to 
be something in life, he will never amount to anything, 
no matter what is done for him,” Mr. Duke remarked. 
His purpose, he emphasized, was to afford opportunity 
for the worthy and ambitious, those who “want to make 
something of themselves.” 

Striving to make provision, as he set forth, for 
mental and spiritual as well as physical needs, to create 
an educational institution of the highest rank, his plans 
were as broad as the realm of human knowledge, his 
sympathies as wide as humanity itself. 

In the locality where he was born and reared, in the 
wide region whose industries he developed, there are 
springing up new hospitals and churches, colleges are 
expanding, orphan asylums opening wide their doors. 
Aged ministers worn out in devoted service, widows 
and orphans, unfortunate victims of injury and illness 
bless their benefactor. 

Almost within sight of the marble tomb where he 
sleeps beside his father will stand the institution that 
bears his name. Those entrusted with administration 
of the endowment he created, the expenditure of the 
funds he provided, are earnestly endeavoring to carry 
forward his plans in the spirit in which they were con- 
ceived, laying the foundations broad and deep. With 


277 


JAMES B. DUKE 


splendid buildings, richly endowed, having all knowl- 
edge for its field, Duke University will have every op- 
portunity to translate into reality the dreams of its 
founder. 

What the future holds the wisest cannot tell. But, 
established with all that generosity could provide or 
forethought ensure, the Duke Endowment gives 
promise of enduring for ages, pouring out its largesse 
continually, extending its benefits to generations yet 
unborn. 


INDENTURE AND DEED OF TRUST 
ESTABLISHING THE DUKE 
ENDOWMENT 





INDENTURE AND DEED OF TRUST ESTAB- . 
LISHING THE DUKE ENDOWMENT 


(With Additions Thereto by the Will of James B. Duke, 
Probated October 23, 1925.) 


Tuis INDENTURE made in quadruplicate this 11th day of 
December, 1924, by and between James B. DukKE, residing 
at Duke Farms, near Somerville, in the County of Somerset, 
and State of New Jersey, United States of America, party of 
the first part, and Nana.ineE H. Duxg, of Somerville, N. J., 
Georce G. ALLEN, of Hartsdale, N. Y., Witt1aM R. PErR- 
Kins, of Montclair, N. J., Witt1am B. Bett, of New York 
City, N. Y., AnrHony J. Drexet Bwwpie, Jr., of New 
York City, N. Y., Water C. Parker, of New Rochelle, 
N. Y., Avex. H. Sanps, Jr., of Montclair, N. J., WiLLt1am 
S. Lez, of Charlotte, N. C., CuHarves I. BuRKHOLDER, of 
Charlotte, N. C., Norman A. Cocke, of Charlotte, N. C., 
Epwarp C, MarsHa.., of Charlotte, N. C. and BENNETTE 
E. Geer, of Greenville, S. C., as trustees and their successors 
as trustees under and in accordance with the terms of this 
Indenture, to be known as the Board of Trustees of this En- 
dowment, parties of the second part, 


WITNESSETH 


That in order to effectuate the trusts hereby created, the 
first party has given, assigned, transferred and delivered, and 
by these presents does give, assign, transfer and deliver, the 
following property, to wit: 

122,647 Shares of Stock of Duke Power Company, a cor- 

poration organized and existing under the laws of the 
State of New Jersey. 

100,000 Ordinary Shares of the Stock of British-American 
Tobacco Company, Limited, a corporation organized 
and existing under the laws of Great Britain. 

281 


JAMES B. DUKE 
75,000 Shares of the Common “B” Stock of R. J. Rey- 


nolds Tobacco Company, a corporation organized and 
existing under the laws of said State of New Jersey. 

5,000 Shares of the Common Stock of George W. Helme 
Company, a corporation organized and existing under 
the laws of said State of New Jersey. 

12,325 Shares of the Stock of Republic Cotton Mills, a 
corporation organized and existing under the laws of 
the State of South Carolina. 

75935-2410 Shares of the Common Stock of Judson Mills, 
a corporation organized and existing under the laws 
of said State of South Carolina. 

unto said trustees and their successors as trustees hereunder, in 
trust, to be held, used, managed, administered and disposed of, 
as well as all additions and accretions thereto and all incomes, 
revenues and profits thereof and therefrom, forever for the 
charitable purposes, in the manner and upon the terms herein 
expressly provided, and not otherwise, namely: 


FIRST 


The trust established by this Indenture is hereby denomi- 
nated The Duke Endowment, and shall have perpetual exist- 
ence. . 

SECOND 


Each trustee herein named, as well as each trustee selected 
hereunder, shall be and remain a trustee so long as such trustee 
shall live and continue mentally and physically capable of 
performing the duties of a trustee hereunder, subject to resig- 
nation and to removal as hereinafter stated. “The number of 
trustees within two years from the date of this Indenture shall 
be increased to, and thereafter remain at, fifteen, such increase 
being made by vote of the trustees at any meeting. He sug- 
gests, but does not require, that, so far as practicable, no one 
may be selected trustee if thereby at such time a majority of 
the trustees be not natives and/or residents of the States of 
North Carolina and/or South Carolina. It is the wish of the 
party of the first part, and he so directs, that his daughter, 
Doris Duke, upon attaining the age of twenty-one years, shall 


282 





THE DUKE ENDOWMENT 


be made a trustee hereunder, for that purpose being elected to 
fill any vacancy then existing, or, if there be no such vacancy, 
added to the trustees thereby making the number of trustees 
sixteen until the next occurring of a vacancy, whereupon the 
number of trustees shall again become and remain fifteen. 

Subject to the terms of this Indenture, the trustees may 
adopt and change at any time rules and regulations which shall 
govern in the management and administration of the trust and 
trust property. 

Meetings of the trustees shall be held at least ten times in 
each calendar year at such time and place and upon such 
notice as the rules and regulations may provide. Other meet- 
ings of the trustees may be held upon the call in writing of 
the chairman or a vice-chairman or any three trustees given in 
accordance with the rules and regulations, at such place and 
time and for such purpose as may be specified in the call. A 
majority of the then trustees shall constitute a quorum at any 
such meeting, but less than a majority may adjourn any such 
meeting from time to time and from place to place until a 
quorum shall be present. ‘The affirmative vote of the majority 
of a quorum shall be necessary and sufficient at any such meet- 
ing to authorize or ratify any action by the trustees hereunder, 
except as herein otherwise expressly provided. Written rec- 
ords, setting forth all action taken at said meetings and the 
voting thereon, shall be kept in a permanent minute book of 
the trustees, and shall be signed by each trustee present at the 
meeting. . 

The trustees shall select annually from their number a 
chairman and two vice-chairmen, and a secretary and a treas- 
urer, who need not be trustees. Such officers shall hold office 
for one year and thereafter until their respective successors 
shall be selected. ‘The compensation of the secretary and treas- 
urer shall be that fixed by the trustees. 

The trustees shall establish an office, which may be changed 
from time to time, which shall be known as the principal 
office of this trust, and at it shall be kept the books and papers 
other than securities relating to this trust. 

By the affirmative vote of a majority of the then trustees 
any officer, and by the affirmative vote of three-fourths of the 


283 


JAMES B. DUKE 


then trustees any trustee, may be removed for any cause what- 
ever at any meeting of the trustees called for the purpose in 
accordance with the rules and regulations, 

Vacancies occurring among the trustees from any cause 
whatever (for which purpose an increase in the number of 
trustees shall be deemed to cause vacancies to the extent of 
such increase in number of trustees) may be filled by the re- 
maining trustees at any meeting of the trustees, and must be 
so filled within six months after the vacancy occurs; provided 
that no person (except said Doris Duke) shall remain or be- 
come a trustee hereunder who shall not be or at once become a 
trustee under the trust this day being created by the party of 
the first part by Indenture which will bear even date herewith 
for his said daughter and his kin and their descendants, so long 
as said latter trust shall be in existence. 

Each trustee shall be paid at the end of each calendar year 
one equal fifteenth part of three per cent of the incomes, reve- 
nues and profits received by the trustees upon the trust prop- 
erties and estate during such year, provided that if any trustee 
by reason of death, resignation, or any other cause, shall have 
served during only a part of such year, there shall be paid 
to such trustee, if alive, or if such trustee be dead then to 
the personal representatives of such trustee, such a part of said 
one-fifteenth as the time during which said trustee served 
during such year shall bear to the whole of such year, such 
payment to be in full for all services as trustee hereunder and 
for all expenses of the trustees. In the event that any trustee 
shall serve in any additional capacity (other than as chairman 
or vice-chairman) the trustees may add to the foregoing com- 
pensation such additional compensation as the trustees may 
think such trustee should receive by reason of serving in such 
additional capacity. 

No act done by any one or more of the trustees shall be 
valid or binding unless it shall have been authorized or until 
it shall be ratified as required by this Indenture. 

The trustees are urged to make a special effort to secure 
persons of character and ability, not only as trustees, but as 
officials and employees. 


284 


THE DUKE ENDOWMENT 


THIRD 


For the purpose of managing and administering the trust, 
and the properties and funds in the trust, hereby created, said 
trustees shall have and may exercise the following powers, 
namely: 

To manage and administer in all respects the trust hereby 
created and the properties and funds held and arising here- 
under, in accordance with the terms hereof, obtaining and 
securing for such purpose such assistants, office space, force, 
equipment and supplies, and any other aid and facilities, upon 
such terms, as the trustees may deem necessary from time to 
time. 

To hold, use, manage, administer and dispose of each and 
every of the properties which at any time, and from time to 
time, may be held in this trust, and to collect and receive the 
incomes, revenues and profits arising therefrom and accruing 
thereto, provided that said trustees shall not have power to 
dispose of the whole or any part of the share capital (or rights 
of subscription thereto) of Duke Power Company, a New 
Jersey corporation, or of any subsidiary thereof, except upon 
and by the affirmative vote of the total authorized number of 
trustees at a meeting called for the purpose, the minutes of 
which shall state the reasons for and terms of such sale. 

To invest any funds from time to time arising or accruing 
through the receipt and collection of incomes, revenues and 
profits, sale of properties, or otherwise, provided the said 
trustees may not lend the whole or any part of such funds 
except to said Duke Power Company, nor may said trustees 
invest the whole or any part of such funds in any property 
of any kind except in securities of said Duke Power Company, 
or of a subsidiary thereof, or in bonds validly issued by the 
United States of America, or by a State thereof, or by a dis- 
trict, county, town or city which has a population in excess of 
fifty thousand people according to the then last Federal census, 
which is located in the United States of America, which has 
not since 1900 defaulted in the payment of any principal or 
interest upon or with respect to any of its obligations, and the 


285 


JAMES B. DUKE 


bonded indebtedness of which does not exceed ten per cent of 
its assessed values. Provided further that whenever the said 
trustees shall desire to invest any such funds the same shall be 
either lent to said Duke Power Company or invested in the 
securities of said Duke Power Company or of a subsidiary 
thereof, if and to the extent that such a loan or such securities 
are available upon terms and conditions satisfactory to said 
trustees. 

To utilize each year in accordance with the terms of this 
Indenture the incomes, revenues and profits arising and accru- 
ing from the trust estate for such year in defraying the cost, 
expenses and charges incurred in the management and admin- 
istration of this trust and its funds and properties, and in 
applying and distributing the net amount of such incomes, 
revenues and profits thereafter remaining to and for the 
objects and purposes of this trust. 

As respects any year or years and any purpose or purposes 
for which this trust is created (except the payments hereinafter 
directed to be made to Duke University) the trustees in their 
uncontrolled discretion may withhold the whole or any part 
of said incomes, revenues and profits which would otherwise 
be distributed under the “FIFTH” division hereof, and either 
(1) accumulate the whole or any part of the amounts so 
withheld for expenditures (which the trustees are hereby 
authorized to make thereof) for the same purpose in any 
future year or years, or (2) add the whole or any part of the 
amounts so withheld to the corpus of the trust, or (3) pay, 
apply and distribute the whole or any part of said amounts to 
and for the benefit of any one or more of the other purposes of 
this trust, or (4) pay, apply and distribute the whole or any 
part of said amounts to or for the benefit of any such like 
charitable, religious or educational purpose within the State 
of North Carolina and/or the State of South Carolina, 
and/or any such like charitable hospital purpose which shall be 
selected therefor by the affirmative vote of three-fourths of 
the then trustees at any meeting of the trustees called for the 
purpose, complete authority and discretion in and for such 
selection and utilization being hereby given the trustees in 
the premises. 


286 


THE DUKE ENDOWMENT 


By the consent of three-fourths of the then trustees ex- 
pressed in a writing signed by them, which shall state the 
reasons therefor and be recorded in the minutes of the trustees, 
and not otherwise, the trustees may (1) cause to be formed 
under the laws of such state or states as may be selected by 
the trustees for that purpose a corporation or corporations so 
incorporated and empowered as that the said corporation or 
corporations can and will assume and carry out in whole or in 
part the trust hereby created, with the then officers and trustees 
hereof officers and directors thereof, with like powers and 
duties, and (2) convey, transfer and deliver to said corpora- 
tion or corporations the whole or any part of the properties 
then held in this trust, to be held, used, managed, administered 
and disposed of by said corporation or corporations for any 
one or more of the charitable purposes expressed in this Inden- 
ture and upon all the terms and with all the terms, powers and 
duties expressed in this Indenture with respect to the same, 
provided that such conveyances, transfers and deliveries shall 
be upon such terms and conditions as that in case any such 
corporation or corporations shall cease to exist for any cause 
the property so transferred shall forthwith revert and belong 
to the trustees of this trust and become a part of the corpus 
of this trust for all the purposes thereof. 

Said trustees shall have and may exercise, subject to the 
provisions of this Indenture, any and all other powers which 
are necessary or desirable in order to manage and administer 
the trust and the properties and funds thereof and carry out 
and perform in all respects the terms of this Indenture accord- 
ing to the true intent thereof. 

Any assignment, transfer, bill of sale, deed, conveyance, re- 
ceipt, check, draft, note, or any other document or paper 
whatever, executed by or on behalf of the trustees, shall be 
sufficiently executed when signed by the person or persons 
authorized so to do by a resolution of the trustees duly adopted 
at any meeting and in accordance with the terms of such reso- 
lution. 


287 


JAMES B. DUKE 


FOURTH 


The trustees hereunder are hereby authorized and directed 
to expend as soon as reasonably may be not exceeding Six 
Million Dollars of the corpus of this trust in establishing at 
a location to be selected by them within the State of North 
Carolina an institution of learning to be known as Duke 
University, for such purpose to acquire such lands and erect 
and equip thereon such buildings according to such plans as 
the trustees may in their judgment deem necessary and adopt 
and approve for the purpose, to cause to be formed under the 
laws of such state as the trustees may select for the purpose 
a corporation adequately empowered to own and operate such 
properties under the name Duke University as an institution 
of learning according to the true intent hereof, and to convey 


to such corporation when formed the said lands, buildings and - 


equipment upon such terms and conditions as that such cor- 
poration may use the same only for such purposes of such uni- 
versity and upon the same ceasing to be so used then the same 
shall forthwith revert and belong to the trustees of this trust 
as and become a part of the corpus of this trust for all of the 
purposes thereof. 

However, should the name of Trinity College, located at 
Durham, North Carolina, a body politic and incorporate, 
within three months from the date hereof (or such further 
time as the trustees hereof may allow) be changed to Duke 
University, then, in lieu of the foregoing provisions of this 
division “FouRTH” of this Indenture, as a memorial to his 
father, Washington Duke, who spent his life in Durham and 
whose gifts, together with those of Benjamin N. Duke, the 
brother of the party of the first part, and of other members of 
the Duke family, have so largely contributed toward making 
possible Trinity College at that place, he directs that the 
trustees shall expend of the corpus of this trust as soon as 
reasonably may be a sum not exceeding Six Million Dollars 
in expanding and extending said University, acquiring and 
improving such lands, and erecting, removing, remodeling 
and equipping such buildings, according to such plans, as the 


288 








THE DUKE ENDOWMENT 


trustees may adopt and approve for such purpose to the end 
that said Duke University may eventually include Trinity 
College as its undergraduate department for men, a School 
of Religious Training, a School for Training ‘Teachers, a- 
School of Chemistry, a Law School, a Co-ordinate College 
for Women, a School of Business Administration, a Graduate 
School of Arts and Sciences, a Medical School and an Engi- 
neering School, as and when funds are available. 


FIFTH 


The trustees hereof shall pay, apply, divide and distribute 
the net amount of said incomes, revenues and profits each 
calendar year as follows, to wit: 

Twenty per cent of said net amount shall be retained by 
said trustees and added to the corpus of this trust as a part 
thereof for the purpose of increasing the principal of the trust 
estate until the total aggregate of such additions to the corpus 
of the trust shall be as much as Forty Million Dollars. 

Thirty-two per cent of said net amount not retained as 
aforesaid for addition to the corpus of this trust shall be paid 
to that Duke University for which expenditures of the corpus 
of the trust shall have been made by the trustees under the 
“FOURTH division of this Indenture so long as its name shall 
be Duke University and it shall not be operated for private 
gain, to be utilized by its Board of Trustees in defraying its 
administration and operating expenses, increasing and improv- 
ing its facilities and equipment, the erection and enlargement 
of buildings and the acquisition of additional acreage for it, 
adding to its endowment, or in such other manner for it as the 
Board of Trustees of said institution may from time to time 
deem to be to its best interests, provided that in case such in- 
stitution shall incur any expense or liability beyond provision 
already in sight to meet same, or in the judgment of the trus- 
tees under this Indenture be not operated in a manner calcu- 
lated to achieve the results intended hereby, the trustees 
under this Indenture may withhold the whole or any part of 
such percentage from said institution so long as such character 
of expense or liabilities or operations shall continue, such 


289 


JAMES B. DUKE 


amounts so withheld to be in whole or in part either accu- 
mulated and applied to the purposes of such University in any 
future year or years, or utilized for the other objects of this 
Indenture, or added to the corpus of this trust for the purpose 
of increasing the principal of the trust estate, as the trustees 
may determine. 

Thirty-two per cent of said net amount not retained as 
aforesaid for addition to the corpus of this trust shall be uti- 
lized for maintaining and securing such hospitals, not operated 
for private gain, as the said trustees, in their uncontrolled dis- 
cretion, may from time to time select for the purpose and are 
located within the States of North Carolina and/or South 
Carolina, such utilization to be exercised in the following 
manner, namely: (a) By paying to each and every such hospi- 
tal, whether for white or colored, and not operated for private 
gain, such sum (not exceeding One Dollar) per free bed per 
day for each and every day that said free bed may have been 
occupied during the period covered by such payment free of 
charge by patients unable to pay as the amount available for 
this purpose hereunder will pay on a pro rata basis; and (b) 
in the event that said amount in any year shall be more than 
sufficient for the foregoing purpose, the whole or any part of 
the residue thereof may be expended by said trustees in assist- 
ing in the erection and/or equipment within either or both of 
said States of any such hospital not operated for private gain, 
payment for this purpose in each case to be in such amount 
and on such terms and conditions as the trustees hereof may 
determine. In the event that said amount in any year be more 
than sufficient for both of the aforesaid purposes, the trustees 
in their uncontrolled discretion may pay and expend the whole 
or any part of the residue thereof in like manner for maintain- 
ing and securing hospitals not operated for private gain in any 
other State or States, giving preference, however, to those 
States contiguous to the States of North Carolina and South 
Carolina. And said trustees as respects any year may exclude 
from participation hereunder any hospital or hospitals which 
the trustees in their uncontrolled discretion may think so 


290 





THE DUKE ENDOWMENT 


financed as not to need, or so maintained and operated as not 
to deserve, inclusion hereunder. 

Five per cent of said net amount not retained as aforesaid 
for addition to the corpus of the trust shall be paid to Davidson 
College (by whatever name it may be known) now located at 
Davidson, in the State of North Carolina, so long as it shall 
not be operated for private gain, to be utilized by said institu- 
tion for any and all of the purposes thereof. 

Five per cent of said net amount not retained as aforesaid 
for addition to the corpus of the trust shall be paid to Furman 
University (by whatever name it may be known) now located 
at Greenville, in the State of South Carolina, so long as it 
shall not be operated for private gain, to be utilized by said 
institution for any and all of the purposes thereof. 

Four per cent of said net amount not retained as aforesaid 
for addition to the corpus of the trust shall be paid to the 
Johnson C. Smith University (by whatever name it may be 
known), an institution of learning for colored people, now 
located at Charlotte, in said State of North Carolina, so long 
as it shall not be operated for private gain, to be utilized by 
said institution for any and all of the purposes thereof. 

Ten per cent of said net amount not retained as aforesaid 
for addition to the corpus of this trust shall be paid and dis- 
tributed to and among such of those organizations, institutions, 
agencies and/or societies, whether public or private, by what- 
soever name they may be known, not operated for private 
gain, which during such year in the judgment of said trustees 
have been properly operated as organizations, institutions, 
agencies and/or societies for the benefit of white or colored 
whole or half orphans within the States of North Carolina 
and/or South Carolina, and in such amounts as between and 
among such organizations, institutions, agencies and/or so- 
cieties as may be selected and determined as respects each year 
by said trustees in their uncontrolled discretion, all such pay- 
ments and distributions to be used by such organizations, insti- 
tutions, agencies and/or societies exclusively for the benefit of 
such orphans. 

Two per cent of said net amount not retained as aforesaid 


291 


JAMES B. DUKE 


for addition to the corpus of the trust shall be paid and ex- 
pended by the trustees for the care and maintenance of needy 
and deserving superannuated preachers and needy and deserv- 
ing widows and orphans of deceased preachers who shall have 
served in a Conference of the Methodist Episcopal Church, 
South, (by whatever name it may be known), located in the 
State of North Carolina. 

Six per cent of said net amount not retained as aforesaid 
for addition to the corpus of the trust shall be paid and ex- 
pended by the trustees in assisting (that is, in giving or lending 
in no case more than fifty per cent of what may be required 
for the purpose) to build Methodist churches under and con- 
nected with a Conference of the Methodist Episcopal Church, 
South, (by whatever name it may be known), located in the 
State of North Carolina, but only those churches located in 
the sparsely settled rural districts of the State of North Caro- 
lina and not in any city, town or hamlet, incorporated or un- 
incorporated, having a population in excess of fifteen hundred 
people according to the then last Federal census. 

Four per cent of said net amount not retained as aforesaid 
for addition to the corpus of the trust shall be paid and ex- 
pended by the trustees in assisting (that is, in giving or lending 
in no case more than fifty per cent of what may be required 
for the purpose) to maintain and operate the Methodist 
churches of such a Conference which are located within the 
sparsely settled rural districts of the State of North Carolina, 
and not in any city, town or hamlet, incorporated or unin- 
corporated, having a population in excess of fifteen hundred 
people according to the then last Federal census. 

Expenditures and payments made hereunder for maintain- 
ing such superannuated preachers, and such widows and or- 
phans, as well as for assisting to build, maintain and operate 
such Methodist churches, shall be in the uncontrolled discre- 
tion of the trustees as respects the time, terms, place, amounts 
and beneficiaries thereof and therefor; and he suggests that 
such expenditures and payments be made through the use of 
said Duke University as an agency for that purpose so long as 
such method is satisfactory to the trustees hereof. 

292 


THE DUKE ENDOWMENT 


SIXTH 


Subject to the other provisions of this Indenture, said trus- 
tees may pay, apply, divide and distribute such incomes, reve= 
nues and profits at such time or times as may in their discretion 
be found best suited to the due administration and manage- 
ment of this trust, but only for the purposes allowed by this 
Indenture. 

In the event that any stock dividend or rights shall be de- 
clared upon any of the stock held under this instrument, the 
said stock and rights distributed pursuant thereto shall for all 
purposes be treated and deemed to be principal even though the 
said stock dividend and/or rights shall represent earnings. 

No trustee hereby appointed and no trustee selected in pur- 
suance of any powers herein contained shall be required to 
give any bond or other security for the performance of his, her 
or its duties as such trustee, nor shall any trustee be required 
to reserve any part of the income of any investment or security 
for the purpose of creating a sinking fund to retire or absorb 
the premium in the case of bonds or any other securities what- 
ever taken over, purchased or acquired by the trustees at a 
premium. 

The term “subsidiary” as herein used shall mean any com- 
pany at least fifty-one per cent of the voting share capital of 
which is owned by said Duke Power Company. 

The party of the first part hereby expressly reserves the 
right to add to the corpus of the trust hereby established by way 
of last will and testament and/or otherwise, and in making 
such additions to stipulate and declare that such additions and 
the incomes, revenues and profits accruing from such addi- 
tions shall be used and disposed of by the trustees for any of 
the foregoing and/or any other charitable purposes, with like 
effect as if said additions, as well as the terms concerning same 
and the incomes, revenues and profits thereof, had been orig- 
inally incorporated herein. In the absence of any such stipula- 
tion or declaration each and every such addition shall constitute 
a part of the corpus of this trust for all of the purposes of this 
Indenture. 


293 


JAMES B. DUKE 


SEVENTH 


The party of the first part hereby declares for me guidance 
of the trustees hereunder: 

For many years I have been engaged in the detclogtnee of 
water powers in certain sections of the States of North Caro- 
lina and South Carolina. In my study of this subject I have 
observed how such utilization of a natural resource, which 
otherwise would run in waste to the sea and not remain and 
increase as a forest, both gives impetus to industrial life and 
provides a safe and enduring investment for capital. My am- 
bition is that the revenues of such developments shall admin- 
ister to the social welfare, as the operation of such develop- 
ments is administering to the economic welfare, of the com- 
munities which they serve. With these views in mind I recom- 
mend the securities of the Southern Power System (the Duke 
Power Company and its subsidiary companies) as the prime 
investment for the funds of this trust; and I advise the trustees 
that they do not change any such investment except in response 
to the most urgent and extraordinary necessity; and I request 
the trustees to see to it that at all times these companies be 
managed and operated by the men best qualified for such a 
service. 

I have selected Duke University as one of the principal 
objects of this trust because I recognize that education, when 
conducted along sane and practical, as opposed to dogmatic 
and theoretical, lines, is, next to religion, the greatest civilizing 
influence. I request that this institution secure for its officers, 
trustees and faculty men of such outstanding character, ability 
and vision as will insure its attaining and maintaining a place 
of real leadership in the educational world, and that great care 
and discrimination be exercised in admitting as students only 
those whose previous record shows a character, determination 
and application evincing a wholesome and real ambition for 
life. And I advise that the courses at this institution be ar- 
ranged, first, with special reference to the training of preach- 
ers, teachers, lawyers and physicians, because these are most in 
the public eye, and by precept and example can do most to 


294 





THE DUKE ENDOWMENT 


uplift mankind, and, second, to instruction in chemistry, eco- 
nomics and history, especially the lives of the great of earth, 
because I believe that such subjects will most help to develop 
our resources, increase our wisdom and promote human happi- 
ness. ; 

I have selected hospitals as another of the principal objects 
of this trust because I recognize that they have become indis- 
pensable institutions, not only by way of ministering to the 
comfort of the sick but in increasing the efficiency of mankind 
and prolonging human life. The advance in the science of 
medicine growing out of discoveries, such as in the field of 
bacteriology, chemistry and physics, and growing out of in- 
ventions such as the X-ray apparatus, making hospital facilities 
essential for obtaining the best results in the practice of medi- 
cine and surgery. So worthy do I deem the cause and so 
great do I deem the need that I very much hope that the 
people will see to it that adequate and convenient hospitals are 
assured in their respective communities, with especial refer- 
ence to those who are unable to defray such expenses of their 
own. 

I have included orphans in an effort to help those who are 
most unable to help themselves, a worthy cause, productive of 
truly beneficial results in which all good citizens should have 
an abiding interest. While in my opinion nothing can take the 
place of a home and its influences, every effort should be made 
to safeguard and develop these wards of society. 

And, lastly, I have made provision for what I consider a 
very fertile and much neglected field for useful help in 
religious life, namely, assisting by way of support and main- 
tenance in those cases where the head of the family through 
devoting his life to the religious service of his fellow men has 
been unable to accumulate for his declining years and for his 
widow and children, and assisting in the building and main- 
tenance of churches in rural districts where the people are not 
able to do this properly for themselves, believing that such a 
pension system is a just call which will secure a better grade 
of service and that the men and women of these rural districts 
will amply respond to such assistance to them not to mention 


295 


JAMES B. DUKE 


our own Christian duty regardless of such results. Indeed, 
my observation and the broad expanse of our territory make 
me believe it is to these rural districts that we are to look in 
large measure for the bone and sinew of our country. 

From the foregoing it will be seen that I have endeavored 
to make provision in some measure for the needs of mankind 
along physical, mental and spiritual lines, largely confining 
the benefactions to those sections served by these water power 
developments. I might have extended this aid to other char- 
itable objects and to other sections, but my opinion is that so 
doing probably would be productive of less good by reason 
of attempting too much. I therefore urge the trustees to seek 
to administer well the trust hereby committed to them within 
the limits set, and to this end that at least at one meeting each 
year this Indenture be read to the assembled trustees. 


EIGHTH 


This Indenture is executed by a resident of the State of 
New Jersey in said State, is intended to be made, administered 
and given effect under and in accordance with the present 
existing laws and statutes of said State, notwithstanding it 
may be administered and the beneficiaries hereof may be 
located in whole or in part in other states, and the vadidity 
and construction thereof shall be determined and governed in 
all respects by such laws and statutes. 

It being the purpose and intention of this Indenture that no 
part of the corpus or income of the trust estate hereby created 
shall ever for any cause revert to the party of the first part, or 
to his heirs, personal representatives or assigns, it is hereby 
declared that: (a) Each object and purpose of this trust shall 
be deemed and treated as separate and distinct from each and 
every other object and purpose thereof to the end that no pro- 
vision of this trust shall be deemed or declared illegal, invalid 
or unenforceable by reason of any other provision or provisions 
of this trust being adjudged or declared illegal, invalid or 
unenforceable; and that in the event of any one or more of 
the provisions of this trust being declared or adjudged illegal, 
invalid or unenforceable that each and every other provision 


296 


THE DUKE ENDOWMENT 


of this trust shall take effect as if the provision or provisions 
so declared or adjudged to be illegal, invalid or unenforceable 
had never been contained in this Indenture; and any and all 
properties and funds which would have been utilized under 
and pursuant to any provision so declared or adjudged illegal, 
invalid or unenforceable shall be utilized under and in ac- 
cordance with the other provisions of this Indenture which 
shall not be declared or adjudged illegal, invalid or unenforce- 
able; and (b) in the event any beneficiary for which provision 
is herein made shall cease to exist for any cause whatever, then 
so much of the funds and properties of this trust as otherwise 
would be utilized for the same shall be thereafter utilized for 
the remaining objects and purposes of this trust. 

IN WITNESS WHEREOF, the said JamEs B. DukE, at his 
residence at Duke Farms in the State of New Jersey, has sub- 
scribed his name and affixed his seal to this Indenture, consist- 
ing with this page and the preceding and following pages of 
twenty-one pages, each page of which, except the following 
page, he has identified by signing his name on the margin 
thereof, all on the day and year first above written. 

James B. Duke (L. S.) 
Witnesses: 
CLARENCE E. Cask 
Forrest Hype 
CLarENCE E. Mapes 


STaTE oF New JERSEY 
County OF SOMERSET 


Br Ir REMEMBERED, that on this 11th day of December, 
1924, before me, a Notary Public of New 
Jersey, personally appeared James B. Duke, who, I am sat- 
isfied, is the grantor named in the within Indenture and Deed 
of Trust dated December 11th, 1924, and I having first made 
known to him the contents hereof, he did acknowledge that 
he signed, sealed and delivered the same as his voluntary act 
and deed, for the uses and purposes therein expressed. 

Wy. R. SuTPHEN, 
Notary Public of N. J. 


297 


JAMES B. DUKE 


We, the undersigned, being the persons designated in the 
within and foregoing Indenture as the trustees of the trust 
thereby created, do hereby accept said trust and undertake to 
act as trustees of the same as in said Indenture set forth. 

NanaLinE H. DuKE 
Georce G. ALLEN 
Witiiam R. PErKINs 
Wi..iAM B. Bett 
AnTHony J. Drexet Buwpie, Jr. 
WALTER C. PARKER 
Avex. H. Sanps, Jr. 
Wi.turaM S. LEee 
CuHarLes L. BURKHOLDER 
Norman A. Cocke 
Epwarp C. MarsHALL 
BENNETTE E. GEER 


OTHER TRUSTS CREATED AND BEQUESTS MADE TO 
ENDOWMENT AND UNIVERSITY 


The properties of The Duke Endowment in some cases 
will be, and in other cac2s may be, augmented by provisions of 
the following instruments executed by Mr. James B. Duke: 

1. By indenture dated December 11, 1924, and executed 
at Duke Farms in Somerset County, New Jersey, Mr. 
Duke created a trust which he denominated The Doris Duke 
Trust, which is to continue so long as any one or more of the 
following persons, 

Doris Duke, his daughter; Mary Duke BiwpLe, Mary 
Duxe Biwpite II, Antuony J. Drexex Bippre III, 
ANGIER BucHanan Duke, Jr., ANrHony Newton Duke, 
Mary Lyon Sracec, EvizaserH Stace Hacknry, Mary 
WasHiIncTon NicHotson, JoHN Matiory Hackney, JR., 
James Stacc Hackney, STERLING JoHNston NICHOLsoN, 
Jr., Mary WasHincTon NicHorson II, Ciara ELIzABETH 
Lyon McC.iamrocu, GreorcEe Leonipas Lyon, Jr., Mary 
Duke Lyon, E. BucHanan Lyon, Marion Noett Lyon, 
Laura ExizaBeETH Lyon, WasHincton Duke Lyon, Bax- 
TER Laurence Duke, Maset DuKke GoopaLL, PEARL 


298 


THE DUKE ENDOWMENT 


Duxe BacumMann, Maset Duxke Gooparui II, and 
MartHa Duianey BacHman, 

who was living when the Indenture was executed shall remain 
alive and for the period of twenty-one years immediately. 
succeeding the death of the last survivor of them, unless sooner 
terminated by its other terms. 

Into this trust Mr. Duke placed $35,000 in cash and 2000 
shares of Duke Power Company, a New Jersey corporation, 
and the will of Mr. Duke, hereinafter mentioned, by Item V 
bequeathed to this trust “All the shares of stock which I may 
own at my death of the Duke Power Company, a New Jersey 
corporation, and / or of any corporation fifty-one per cent of 
the voting share capital of which is owned by the said Duke 
Power Company at that time, if my said daughter Doris Duke 
or a lineal descendant of my said daughter be living at the 
time of my death: ... The shares of stock to which said 
trust may become entitled by virtue of this item of my will 
shall be added to and become a part of the corpus of said 
trust.” As Doris Duke was living when her father died this 
provision of the will takes effect. By it the trust will get 
125,904 shares of the capital stock of Duke Power Company, 
2 shares of the common stock of Soutern Power Company, 
2 shares of the common stock of Great Falls Power Com- 
pany. 

Two-thirds of the income of this trust is to be paid to his 
daughter, Doris, and her descendants if they survive her; one- 
third to his nieces and nephews, named in the Indenture, and 
their descendants in equal shares. Twenty-one years after the 
death of the last surviving beneficiary named in the Indenture, 
the principal of the trust is to be distributed in proportionate 
shares as designated, the remainder of such shares as may 
revert to the trust, by death or otherwise, going to the Duke 
Endowment. 

2. The will of Mr. Duke is dated December 11th, 1924, 
and his codicil thereto October Ist, 1925. Both were pro- 
bated in common form before the Surrogate of Somerset 
County, New Jersey, October 23rd, 1925. 

Besides the bequest, hereinbefore mentioned, to The Doris 


299 


JAMES B. DUKE 


Duke Trust by Item V thereof, it contains the following 
provisions in which The Duke Endowment is, or may be, 
interested : ‘ 

By Item VIII there is bequeathed to 

“the trust established by me by Indenture dated December 
II, 1924, wherein said trust is denominated The Duke En- 
dowment, the sum of Ten Million Dollars, to be added te 
and become a part of the corpus of said trust estate and to be 
held, used, managed, administered and disposed of, as well as 
the incomes, revenues and profits arising therefrom and ac- 
cruing thereto, by the trustees of said trust under and subject 
to all the terms of said trust Indenture, except that: (a) said 
trustees shall use and expend as soon as they reasonably can 
after the receipt of said sum not exceeding Four Million 
Dollars thereof in erecting and equipping, at the Duke Uni- 
versity mentioned and described in said trust, buildings suit- 
able for a Medical School, Hospital and Nurses Home under 
the supervision of said trustees and in all respects as they may 
determine concerning the same, and the acquisition of such 
lands, if any, as may be needed for such purpose, said lands, 
buildings and equipment to be conveyed to and thereafter be- 
long to said Duke University and operated by it; and (b) all 
the incomes, revenues and profits arising and accruing from 
the said Ten Million Dollars shall be utilized, paid, applied 
and distributed each year by said trustees upon, subject to and 
in accordance with all the terms of said Indenture with re- 
spect to the payment and distribution of a percentage of the 
incomes, revenues and profits of said trust to and for said 
Duke University.” 

By Item X a trust is created with the same trustees, and 
practically the same powers, as those of The Doris Duke 
Trust. Into this trust is placed “one-third in value of said 
residuary estate and, in addition thereto, such a portion of said 
residuary estate as will in the judgment of my executors cer- 
tainly produce a net annual income of One Hundred Thou- 
sand Dollars from said portion.” 

As respects said “portion” it is provided: 

“The trustees of this trust each year shall pay, apply and 


300 


THE DUKE ENDOWMENT 


distribute the net amount of the incomes, revenues and profits 
arising and accruing from the said portion of said residuary 
estate to my said wife so long as she shall live, and upon the 
death of my said wife this trust shall cease and terminate as 
to said portion and any undistributed incomes, revenues and 
profits thereof, and said portion and all undistributed incomes, 
revenues and profits thereof, shall be paid, applied and dis- 
tributed by said trustee into the trust created and established 
by me by Indenture dated December 11th, 1924 wherein said 
trust is denominated The Duke Endowment.” 

As respects said “one-third in value” it is provided: 

“The trustees of this trust each year shall pay and distribute 
the net amount of the incomes, revenues and profits arising 
and accruing from said one-third in value of said residuary 
estate, or so much thereof as may not then have been dis- 
tributed under the terms of this trust, to my said daughter so 
long as she may live and after her death per capita, in equal 
portions, to and among the lineal descendants of my said 
daughter who may be living at the time of the making by the 
trustees of each particular payment and distribution thereof, 
so long as this trust shall continue after the death of my said 
daughter and a lineal descendant of my said daughter shall 
be living, but in no event subsequent to the last day of the said 
twenty-one year period herein mentioned and described for 
the duration of this trust.” 

One-third of this portion of the trust is to be paid to his 
daughter when she is 21 years old, one-half of the residue 
when she is 25 and the remainder when she reaches 30 years 
of age. In case neither she nor any of her descendants sur- 
vive, the remaining portion of this fund is to go to the Duke 
Endowment. 

Item XI of Mr. Duke’s will, as changed by the codicil, 
reads: 

“The residue of said residuary estate not disposed of by 
Item X hereof I give, devise and bequeath, and I direct my 
executors to pay and distribute, into the trust established by 
me by Indenture dated December 11, 1924 wherein said 
trust is denominated The Duke Endowment, to be added to 


301 


JAMES B. DUKE 


and become a part of the corpus of said trust and to be held, 
used, managed, administered and disposed of, as well as the 
incomes, revenues, and profits arising therefrom and accruing 
thereto, by the trustees of said trust under and subject to all the 
terms of said trust Indenture, except that the trustees of said 
trust shall use and expend Seven Million Dollars ($7,000,- 

000) of the principal thereof in building and equipping Duke 
University and acquiring and improving property necessary 
for that purpose, according to such plans as may have been 
or may hereafter be adopted by them for such purpose, and 
except further that the incomes, revenues and profits arising 
from and accruing to said residue of said residuary estate shall 
be utilized, paid, applied and distributed each year by said 
trustees as to ninety per cent thereof upon, subject to and in 
accordance with all the terms of said Indenture with respect 
to the payment and distribution of a percentage of the in- 
comes, revenues and profits of said trust to and for maintain- 
ing and securing hospitals, and as to the remaining ten per 


cent thereof upon, subject to and in accordance with all the © 


terms of said Indenture with respect to the payment and dis- 
tribution of a percentage of the incomes, revenues and profits 
of said trust to and for said Duke University.” 


302 








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